Value-based care (VBC) has been in the healthcare vocabulary ever since Michael Porter and Elizabeth Olmsted Teisberg introduced the concept in their book “Redefining Health Care” in 2006. While CMS (Centers for Medicare and Medicaid Services) piloted initiatives as far back as 2005 wherein payments were linked to quality outcomes, VBC initiatives grew after the Affordable Care Act was passed . Despite a decade and half of various VBC initiatives, the shift from volume to a focus on value is still underway, with partial progress in the form of value-based payment initiatives that have a systematic approach to improving quality, controlling costs, and increasing satisfaction.
Although participation in value-based payments is on the rise, adoption is lagging compared to goals and benchmarks set by the Secretary of Health and Human Services. Moreover, the complexity of existing alternative payment models and the ease of the traditional fee-for-service model hinder the adoption of contracts that are full-risk bearing.
While each stakeholder may have conflicting interests, the overall value of value-based care is the improvement of health outcomes and reduction of cost of care at a population level. For example, value-based care is important for payers to achieve medical cost optimization whereas the reimbursements incentivize providers, hospitals, and physicians to deliver outcomes and help achieve enhanced patient experience. Finally, patients seek better outcomes, experience and convenience.
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