Like it or not, value-based care is on the rise. A reaction to both fee-for-service billing and fixed payments tactics like capitation, value-based care takes a different view. In a way, it is a cross between the two approaches. There is limitation on how much care providers can charge. At the same time, there’s the implied interest in doing what is necessary for the good of the patient, not just what is necessary without spending more than an insurance company will pay.
Providers that use value-based care become almost like insurance companies, or risk-management pools, themselves. There’s no guarantee that each patient will be “profitable” and attempts to manage early intervention and address problems before they become severe — as with population health management — are forms of mitigating risk, both health and financial.
This is unlikely a fad. A new survey shows that top healthcare executives expect value-based care to disrupt the industry even more than scientific innovation will in the coming decade. Here are the reasons healthcare professionals can’t ignore the trend.
According to the survey, carried out by consultancy Lazard, there will likely be a point within the next few years when value-based approaches gain enough momentum to become unavoidable. That is likely because “pricing pressure is considered to be the top strategic challenge facing the industry, by a wide margin across sub-sectors and geographies.” The increase in insurance rates and healthcare costs cannot continue unabated without swallowing up much of the world’s economy.
Big players are moving ahead
Industry directions are often effectively set by large institutions and organizations. Their size lets them impose requirements on everyone doing business with them. Trends trickle outward, like ripples from a stone dropped into a still pond. In a different survey, BDC Advisors found that a dozen major healthcare leaders will continue value-based care even with uncertainties in the regulatory and legal worlds. They see the approach as important to long-term success and so will probably integrate it with whatever specifics are demanded by any changes in healthcare laws.
Health plans want the approach
In the past, health plans have been wary about value-based care and outcomes-based contracts (OBCs). The issue had been finding ways to make OBCs work within their operational models. But a third survey, by Avalere, suggests that 70 percent of health plans are favorable to OBCs; 54 percent already have one or more OBCs in place. The reason is the hope to reduce costs and improve care at the same time.
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