Value-based care (VBC) is a type of reimbursement model where payments for health care delivery are intended to correlate with the quality of care rather than the number of services provided.
In other words, rather than being paid for ordering more tests, performing more procedures, and providing other “reactive” forms of care, providers are rewarded for improving their patients’ health using evidence-based medicine.
VBC models use several metrics to define quality of care. These include:
- Patient outcomes,
- Use of certified health IT,
- Preventative care,
- Hospital readmissions,
- Adverse events, and
- Patient engagement.
Under VBC models, providers must track this data and demonstrate improvement over time to collect reimbursements.
Several notable improvements to health care quality, cost, and outcomes have come about as a result of implementing VBC. For example, a 2015 report found that VBC models helped reduce hospital readmissions by 8% for Medicare beneficiaries. Implementation of a particular type of VBC model, patient-centered medical homes (PCMH), led to a 15% decrease in emergency room visits for a Colorado-based PCMH and increased YOY quality scores by 10% for a Maryland-based PCMH.
VBC models also enable significant cost savings. Accountable care organizations (ACOs), a type of VBC, achieved over $4.1 billion in total Medicare cost savings in 2020, up from $417 million just 5 years prior.
Although VBC has had success in some cases, adoption is slow due to physicians’ concerns about complex regulations, increased administrative burden, and an increasingly difficult reimbursement landscape. While this presents a challenge, a successful path forward can prioritize physician involvement in the decision-making and implementation process to ensure organizational alignment.