The healthcare industry is making a fundamental shift in how physicians and hospitals provide care and receive payment for it. The fee-for-service or volume-based care model will give way to the value-based care model.
Before the Affordable Care Act (ACA), physicians and healthcare facilities almost exclusively billed Medicare or insurers for the individual services they provided — each appointment, each test, each procedure. With that fee-for-service model, however, there is more potential reward for physicians who provide the greatest number of services, not necessarily for those that provide care that results in the best patient outcomes. Stakeholders in organizations paying for healthcare realized that they were spending more, but patient outcomes weren’t necessarily better.
The value-based care model, however, bases payment to physicians and healthcare facilities based on performance. Healthcare providers are rewarded with incentives for better patient outcomes, fewer readmissions or complications, and providing care in the most cost-effective way.
Medicare’s Transition to Value-Based Care
The Centers for Medicare and Medicaid Services (CMS) have established programs that are incentivizing the move from fee-for-service to value-based healthcare. The timeline for CMS’ value-based care program implementation began in 2012 with the End-Stage Renal Disease Quality Incentive Program. Also that year, CMS implemented the Hospital Readmission Reduction Program, which reduces payments to hospitals with excessive readmissions, and the Hospital Value-Based Purchasing Program, which adjusts payments to hospitals under the Inpatient Prospective Payment System (IPPS), based on the quality of care.
The Hospital-Acquired Condition (HAC) Reduction Program began in Fiscal Year 2015, requiring the Secretary of Health and Human Services to adjust payments to hospitals ranking in the lowest one-fourth of all facilities with respect to HAC quality. HAC was followed by the Value Modifier Program, which determines payments based on physician performance on quality and cost measures. The Skilled Nursing Facility Value-Based Purchasing program was implemented in 2018, rewarding facilities with incentives for minimizing hospital readmissions. In 2019, CMS implemented the Alternative Payment Model that provides added incentives for high-quality and cost-effective care.
Value-Based Healthcare Models
Healthcare providers aligning with CMS’ value-based healthcare programs are generally choosing from three models for their practices:
The Role Technology Will Play in Value-Based Care
One thing that all value-based healthcare models have in common is collecting and analyzing large volumes of data. Humana-sponsored Healthcare Financial Management Association (HFMA) research released in 2018 pointed to interoperability as a major challenge that healthcare providers will face as seamless data exchange is required to provide value-based care. Of the hospital financial executives surveyed, 74 percent cited the ability to collect and share data as an extremely important ability in the next few years.
Emerging technologies may hold the potential to facilitate challenging aspects of value-based healthcare. Artificial intelligence (AI) and machine learning can assist in diagnosis, improve documentation and records management, and complete routine work, freeing clinicians to focus on patients and mission-critical tasks. AI also has the potential to analyze data streams from EHR, patient monitoring and medical devices, prioritizing alerts, and providing physicians with the more important information.
Blockchain technology, characterized by immutable, secure transactions, can also play a role in value-based care, giving healthcare providers a way to share records and prohibiting changes without collaborative approval.
Add Value to Solutions for Value-Based Healthcare Providers
As you market your Medtech systems and devices, you can show additional value by demonstrating how it can be used in a value-based healthcare environment. For example, if your products integrate with the healthcare providers’ EHRs and other systems, stress how partnering with your business can take them closer to the collaborative environment that value-based care requires.
As a part of the evolving healthcare ecosystem, your Medtech company, like healthcare organizations and physician practices, must adapt as the industry shifts to value-based care. Turn this challenge into a way to grow your business and build stronger relationships with your clients.
About the Author
Carevoyance contributor Bernadette Wilson of B Wilson Marketing Communications is an experienced journalist, writer, editor, and B2B marketer, specializing in content for technology companies.