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Value-based care: better care, better health, lower costs

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As a health care consumer, you’re paying more of your health care costs and making more of your own care decisions. Those costs can seem out of control, but now health plans, doctors and health care systems are beginning to work together on solutions that will benefit your wallet and your health.

Value-based care is emerging as a solution to address rising health care costs, clinical inefficiency and duplication of services, and to make it easier for people to get the care they need. In value-based models, doctors and hospitals are paid for helping keep people healthy and for improving the health of those who have chronic conditions in an evidence-based, cost-effective way.

This is a departure from the traditional fee-for-service approach. With fee-for-service, doctors and hospitals are paid based on the number of health care services they deliver, such as tests and procedures. Payment generally has little to do with whether their patients’ health improves.

But what does that mean for you?

A value-based approach is designed around patients. Medical care teams zero in on individual needs, whether preventive, chronic or acute. You benefit from a team that coordinates your care, and technology that connects you and your providers with information to help you get the right care — across the health care system.

Four models in action

  1. Accountable care organization (ACO). Accountable care organizations are transforming care delivery by paying health systems and doctors based on their success at improving overall quality, cost and patient satisfaction with their health care experience. ACOs are alliances of doctors, hospitals and other health care providers that deliver and coordinate care for their patients. In an ACO, providers are responsible for improving the quality of patient care and health outcomes, at equal or lower costs, through better coordination and preventive care.Health plans team up with doctors and health systems to provide experience in managing financial risk, clinical care management expertise, and data and technology that helps connect providers with other providers, health plans and patients. Doctors and health systems that successfully manage the health of the entire population reap the rewards. However, if they do not improve quality and control the cost of care, they may lose money. For you, that means a team of providers is incented to work together to keep you healthy.
  2. Patient-centered medical home (PCMH). A PCMH is a care model led by a primary care doctor that is focused on providing enhanced care coordination across the health care system. In a PCMH, a primary care doctor leads a clinical team that oversees the care of each patient in a practice. The medical practice receives data about their patients’ quality and costs of care in order to improve care delivery. Financial incentives are based on performance on specific quality measures that result in better access to care, more coordinated patient care and improved outcomes. When practices do well on quality and efficiency measures, they share in the savings they create. In this model, you will likely get more coordinated care, easier appointments and more time with your doctors.
  3. Pay for performance (P4P). This model rewards doctors and hospitals that improve or maintain quality, while keeping across-the-board rate increases lower. Doctors, hospitals and health plans together develop and agree to a set of quality and efficiency measures. This model puts a portion of the doctor’s or hospital’s usual fee-for-service payments at risk for improving performance. If the doctor or hospital meets or exceeds the performance measures, they receive payment that had been put aside as an incentive for improved care. While still fee-for-service, this entry-level value-based model encourages quality and efficiency.
  4. Bundled payments. In a bundled payment model, a single payment is made to doctors or health care facilities (or jointly to both) for all services associated with an episode-of-care, such as a hip or knee replacement. “Bundled payment rates” are determined based on the costs expected for a particular treatment, as well as costs for any preventable complications that may arise. These payment models promote a coordinated, efficient and cost-conscious effort for specific treatments or conditions. Fewer tests are repeated, “overtreatment” declines, and readmissions and length of hospital stays go down.

Whatever the value-based model, it’s meant to deliver better health, more affordably

Value-based care can look different depending on what approach your doctors and health care systems are taking. You may be getting care under one of these arrangements and not even know it. Some are very visible, while others are behind the scenes.

The value-based payment model will continue to evolve and improve. Getting consumers involved in better understanding the models and taking action on their health is an important component of value-based care. As these payment models evolve, we’ll continue to work with doctors, hospitals and other providers to help build a better system, with better health, better care and better costs for everyone.