Regardless of whatever business you operate, the end goal is always customer satisfaction and healthcare is no different. Since healthcare is particularly valuable, it makes sense that the financial reward given to a valuable service should be high and based on a value model.
However, value-based models in healthcare do not have the same outcomes as they do in other businesses.
Value-based payments have their advantages and disadvantages. For instance, on the one hand, value-based systems effectively liberate physicians from the constraints of fee for service so that they can concentrate on the overall health of their patients. Alternatively, some people say that value-based payment systems impose unneeded extra pressure on providers without necessarily getting the job done.
What is value-based payment in medicine?
Value-based systems reward physicians and healthcare providers with incentive payments for the quality of care given to patients with Medicare. These payment systems are part of a strategy to improve how healthcare is delivered and paid for. The purpose of any value-based system is to:
Improve how patients are given care in hospitals
Improve the overall health of the population
Lower the overall cost of healthcare
Effectively, value-based systems move toward paying doctors and healthcare providers based on the quality of care rather than the quantity of care given. Instead of charging patients based on the number of visits and tests that they order (fee for service payments), today, more hospitals are charging based on the value of the care that they give.
Fee for service payments
Traditionally, healthcare providers are refunded by third-party payers like insurance firms or by the government through Medicare or Medicaid. The amount of money that is paid is set at a going rate that is typically established by the agencies themselves. Since the budgeting of the costs and expenses are based on third party consumers, the system is marred by administrative hiccups, which has led to runaway care costs at the expense of the quality of care given and the patient.
The difference between fee for service and value-based payments lies in reimbursements and the quality of care provided.
Guest post by Mark Ott, vice president of product, RoundingWell.
As 2016 unfolds, the move from fee-for-service to value-based care is entering a more advanced stage. As the process evolves, priorities for healthcare providers of resources, teams and tools becomes more convoluted. To keep on track, both for healthcare organizations and CMS changes, providers should keep in mind the following:
The care management/coordination record rises in importance, especially as team-based care models expand
Some call it a care management medical record and others call it a care coordination record. Regardless of the term, the concept is essentially the same. EHRs are basically encounter management systems, but as care expands beyond the in-person encounter, capturing and tracking what happens between patient visits will be of utmost importance. In addition, enabling care teams to stay on the same page about a patient’s care plan, track action steps, and reduce the friction of working together will be crucial to succeeding in a value-based world. Expect to see the Care Management Record concept start catching fire in 2016.
Demand will increase for consumer-grade user experiences in healthcare enterprise software
For so long, clinicians on the frontlines of care delivery have had to struggle with software that’s hard to use, difficult and downright frustrating. The biggest culprit for poor user experiences in healthcare software has to do with the enterprise purchasing process. Vendors build for buyers, like the C-suite, who aren’t also the end users. If the end user and the buyer were the same, you’d see healthcare software vendors value user experience like what we see in other B2B industries, not to mention B2C industries. Regardless, in 2016 we will see more buyers value products with consumer-grade user experiences. Much of this has to do with end users’ reluctance and sometimes outright resistance to adopting technology in their worklife. Clinicians often get a bad wrap for being technology averse. But in reality, it’s not that they’re averse to technology; it’s that they’re averse to bad technology.
Integrating wearables and their data into care delivery processes will remain a niche activity
The enthusiasm around wearables, trackers and remote monitoring is exciting and there is enormous potential for device data to impact the delivery of care in ways that benefit both patient and provider. But the technology hasn’t caught up with the promise of what they can be, and that won’t change in 2016. Not only is the technology not yet able to deliver, but the incentives and processes to support wide-scale deployment are not in place yet. Though all signs point to wearables becoming an integral part of delivery of care, this won’t happen next year.
Guest post by Ken Perez, vice president of healthcare policy, Omnicell.
We’ve often seen the U.S. federal government announce its intent to drive major changes in the way the healthcare system is run, only to have the private sector respond in a tepid or negative manner.
That was not the case at a January 26 Department of Health and Human Services meeting, at which HHS Secretary Sylvia M. Burwell announced concrete goals and an aggressive timeline for moving Medicare payments from fee for service to fee for value. Nearly two dozen leaders representing consumers, insurers, providers and business leaders were in attendance and clearly supportive of the vision cast by Burwell. Notably, high-ranking representatives from the American Academy of Family Physicians, the American Medical Association, the American Hospital Association, and America’s Health Insurance Plans (AHIP) were among the participants.
The announcement was a landmark one. For the first time in the history of the Medicare program, HHS has communicated quantified goals for pushing a significantly greater share of Medicare payments through alternative payment models, such as accountable care organizations (ACOs) and bundled payments. Such payments will rise from 20 percent ($72.4 billion) of Medicare payments in 2014 to 30 percent ($113 billion) in 2016 and 50 percent ($213 billion) in 2018—a compound annual growth rate of 31 percent over the five-year period.