By David B. Snow, Jr., chairman and CEO, Cedar Gate Technologies.
If you are reading this, you already know that the fee-for-service model conflicts with the delivery of quality healthcare and the ongoing optimal management of chronic conditions. The model incentivizes the quantity of services rendered and disincentivizes preventive care. As a result, fee-for-service is highly inefficient for payers and not aligned with the sustainability of healthcare delivery systems.
Value-based care has presented a better model for providers, payers, self-insured employers, and patients alike. However, it was not until recently that value-based care was positioned for adoption at scale. The challenge in adoption has always been the realignment of financial incentives and focus on long-term optimization of patient outcomes. New technology platforms have had to evolve to the point they enable fully integrated analytics, population health management, and administrative capabilities to realize the transformational opportunity we have in front of us.
Value-based care is the path to translating early intervention into healthcare savings. In 2016, a study on primary care spending in the United States showed total healthcare costs increased from $810 billion to $1.6 trillion. Specialty care accounted for 75% of healthcare spending in the United States. According to the CDC, four in 10 Americans have two or more chronic conditions requiring continued treatment by specialists.
Comprehensive value-based care requires identifying health risks and chronic conditions early. It necessitates consistent monitoring of an individual’s health and the earliest possible interventions through primary care, and specialists when necessary. In value-based healthcare, getting patients to high-performing specialists, backed by clinical outcomes data, must be prioritized to avert severe conditions and their corresponding high costs. Early intervention is proven to drive the most optimal patient outcomes while significantly reducing cost. Meaningful, specialized intervention is one of the most powerful strategies for saving lives—and therefore, it should be at the heart of advancing healthcare.
Value-based Models are Ready for Adoption
Why isn’t there complete adoption of value-based care, given its alignment with patient outcomes and cost reduction? The factors are varied, but the perceived financial risks and lack of technology enablement have held back adoption – until now.