Why value-based healthcare makes a difference for both providers and patients

There is a lot of focus in healthcare circles today on “value-based care” — a term used to describe healthcare systems where payments are no longer tied to the number of procedures they perform, but to the quality of the outcomes that they achieve with patients.

There is a lot of focus in healthcare circles today on “value-based care” — a term used to describe healthcare systems where payments are no longer tied to the number of procedures they perform, but to the quality of the outcomes that they achieve with patients.

Buzzwords aside, this new approach is not only a good thing for patients, it’s also good for healthcare providers and for the economy as a whole. In recent years, providers and payers (both commercial and government) have watched as costs in the healthcare system rose at an unsustainable rate, creating a need to replace the status quo. Businesses, government and patients have all felt the crushing costs of healthcare under a fee-for-service system.

In a volume-driven care system, there is no incentive for patients or providers to consider the cost of care. That often means performing more — sometimes unnecessary — tests and ordering more procedures, regardless of their ability to affect the patient’s overall health or provide a better outcome.

In a value-based care system, providers must show that they are meeting quality thresholds, containing costs and using an evidence-based approach to provide safe and effective care for patients.

Consumer-Driven Changes
It should come as no surprise that consumers are also driving payers and providers toward lower-cost care with better outcomes. As healthcare costs have risen dramatically over the past couple of decades, many consumers are paying more attention to costs than ever, likely due to a convergence of several factors:

• The rise of high-deductible health plans.
• Higher co-payments.
• Employers and insurers shifting more costs to patients.
• Greater transparency into costs and providers.

For years the conventional wisdom in the healthcare industry was that consumers don’t “shop” for healthcare the way that they do for other major purchases, but that trend is shifting. The 2015 Consumer Health Insights (CHI) survey by global management consulting firm McKinsey & Co. identified that consumers today want the same things in a healthcare purchase as they would in retail, technology or any other industry: great customer service, a company that delivers on its promises, offers the best value and makes their life easier.

However, it’s important to note that while consumers are paying more toward their own healthcare and taking price into consideration for care, that doesn’t necessarily mean they are only looking for the lowest-priced care. Low-cost care is important, but most patients don’t like the idea of “cheap” healthcare. What they want is the best possible healthcare at the best possible price — which should be the goals of any successful value-based healthcare program.

A Team-Based Approach
Discovering the best way to navigate the new healthcare system is not something that falls entirely on individual providers. It requires that physicians, mid-level providers, nurses, medical assistants, administrators and every member of a clinical staff work together. This coordination of care is critical to success — not just within clinics, but across clinics and across specialties and practice areas — so patients get the right care at the right time in the right place.

The focus on quality means that care providers can no longer approach a patient in terms of how many procedures they will perform. Instead, it means that each patient interaction needs to provide value, and that providers need to use proven methods, innovative ideas and cutting-edge technology to help patients achieve better health.

A value-based approach also means everyone — including primary care providers and specialty physicians — must be focused on how to keep the overall cost of care manageable for patients. It doesn’t mean cutting corners or taking shortcuts in care, but it does mean being aware of major cost drivers, such as emergency department visits and hospitalization, and helping patients understand options that could prevent the need for these high-cost care touch points.

One of the challenges with value-based care and the recent shift toward quality is that it can be pretty subjective. Almost any healthcare system can tell you that they are offering better care to their patients at a lower cost. As a patient, it’s hard to know what that really means, and which providers or which systems are truly going to offer the best care.

Revere Health, a large group of independent physicians in Utah, has been making the shift toward value-based care in recent years, and its officials report that change is not always easy. As one of two Utah-based Medicare Accountable Care Organizations (ACOs), the 241 physicians and mid-level providers within the Revere Health system have focused on system improvements such as appropriate use of testing, helping high-risk patients better manage their health, measuring and analyzing data on quality and patient outcomes and creating processes for continuous improvement.

Revere Health thinks that this approach works. The Medicare Shared Savings Program (MSSP) recently released results from 2015, which showed that Revere Health is reportedly providing better care at a more affordable cost.

In 2015 the company’s quality scores went up 11 percent from the previous year, to 92 percent, and it lowered the overall cost of care for the patients in its ACO by nearly $14 million — a savings of 8.8 percent. Only 30 percent of the 392 MSSP groups met the threshold for shared savings.

Healthcare in America is evolving and physicians can no longer wait on the sidelines or maintain the status quo. Healthcare systems that are going to be able to move into the future need to offer consumers a value proposition, both in terms of the quality of care and the affordability of that care.

And while these changes will impact providers and healthcare systems, the most important factor in the equation has nothing to do with doctors, hospitals or healthcare providers. What is the main reason for a shift to value-based care? It’s simple: the health and happiness of the patients.

Scott Barlow is the CEO of Revere Health, a network of independent healthcare providers in Utah.