Three Reasons Why Value-based Care Works

1. Patients spend less money to achieve positive health outcomes.

Medical care can be costly, particularly for patients with chronic diseases, such as high blood pressure, diabetes, heart disease, or cancer. Value-based care places an emphasis on finding cost-effective, efficient treatment plans, while also supplying the skills to avoid chronic disease altogether. Since value-based care promotes prevention-based services, in the future patients will have less need for medical services such as emergency room visits, lab testing, or imaging studies.

A recent study published in the New England Journal of Medicine tracked changes in spending, implementation, and quality of care over eight years of Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract (AQC) model.

The study found that the average annual medical spending for AQC program enrollees was $461 lower than patients not enrolled in AQC. This 11.7% savings on claims stemmed from lower prices and long-term reduction in the need for services, including an overall drop in future emergency room visits. AQC enrollees had smaller growth in average medical spending, with savings continuing to deepen over time, correlating to the increased use of prevention-based patient services.

2. Providers get rewarded for effective care.

The shift to prevention-based care means that providers can spend less time-and money-treating chronic disease. This encourages providers to find new ways to provide comprehensive care to improve outcomes and patient satisfaction.

Related: Value-Based Care: Gaining Ground or Losing Steam?

Unlike fee-for-service models, value-based care allows practitioners to focus on what the best treatment is for their patient, rather than what is the costliest. When the focus is on value instead of volume, quality of care increases. And, under value-based care models, when quality of care increases, so do the financial rewards to the provider.

For example, the AQC model provides practitioners, hospitals, and medical centers with financial incentives and reimbursements for controlling costs while improving quality and meeting targets related to patient care and satisfaction.

3. Patient care becomes coordinated.

Value-based models encourage a team-oriented approach to patient care. Under a value-based model, medical care is not siloed. This means that primary, specialty, and acute care are integrated, and that healthcare providers work as a networked team to deliver the best coordinated care. For example, treatment plans may require the contributions pharmacists, behavioral health providers, social services, specialists, and more. Each contributing party shares in the incentives of a positive outcome.

This provides comprehensive, coordinated care, while also allowing outcomes to be easily measured through shared patient data-particularly important since value-based incentive payments are based on outcome. Shared patient data can also reduce redundancies in care, preventing unnecessary costs.

This shared value-based approach differs greatly from the traditional fee-for-service model where providers are incentivized to individually order more procedures and tests to get paid more-while increasing costs to patients.

Laura Dorr is a freelance writer based outside of Cleveland, Ohio. She has served as a writer and editor for a variety of publications and websites across the medical, dental, sports, education, and nonprofit industries.