Why Healthcare Practices Should Transition to Value-Based Care Now

The Healthcare spending of the United States accounts for nearly 18 percent of gross domestic product. The interesting part? This is more than other wealthy countries. However, we’re not sure about the celebration part. This is because the healthcare system in the United States is still lagging behind in many ways.  

While the U.S Healthcare System offers some of the best medical outcomes, in some cases, it’s vice versa, providing ineffective or unnecessary care. This blog is not about introducing a new system in improving Healthcare quality, but improving the existing system!   

Value-based Care in Healthcare aims to decrease the instances of poor medical care and increase positive outcomes, safety, and service. The future of Healthcare may be uncertain, but it’s hard to dispute the benefits of Value based Care metrics, from lowering costs to reducing medical errors and promoting healthy habits and patient satisfaction.  

Value-Based Care in Healthcare

What is Value-Based Care in Healthcare?

Value-based Care metrics in Healthcare is entirely based on the idea of improving the quality of Healthcare, to prevent problems even before they start. The focus on prevention and the Value-based Healthcare offering lowers the need for expensive medical tests, ineffective medications, and mainly unnecessary procedures.  

Instead of the present “fee-for-service” approach, providers like hospitals and doctors are compensated based on patient outcomes under a Value-based system. In other words, the Healthcare Professional receives compensation for making people healthy. Instead of taking a reactive strategy, this one is proactive. 

What is Value-Based Care Model?

Value-based Care Models strongly emphasize an interdisciplinary team approach where patient data is shared, and care is coordinated, making it more straightforward to measure outcomes.  

Patient-centered Medical Homes:

The integration of primary and acute care is known as Patient-centered Medical Homes. This isn’t a physical location, but a team approach to patient care, led by the patient’s primary care physician. Patient-centered Medical Homes share Electronic Medical Records with all Healthcare providers and others on the respective coordinated care team, so that they all possess easy access to the same Patient Information. 

Accountable Care Organizations:

This Value-based Model, Accountable Care Organizations are created explicitly for Medicare patients. Healthcare centers, doctors, and providers work together to provide adequate care for the lowest possible cost. Like Patient-centered Medical Homes, Accountable Care Organizations generally focus on teamwork and data sharing. 

Bundles Payments:

Instead of charging patients for each service, payments are combined together. With the lumped payment method, multiple providers are reimbursed together rather than paid individually. 


A Capitation Model entails providers bearing financial liability for the health and welfare of a certain patient population. Each year, members pay a premium that is pooled and used by the provider to provide care for the population. Instead of receiving payment from payers (such as insurance companies) for each service rendered, providers would use the funds to make decisions that would improve population health. For instance, there might be a higher payment for patients with a long history of illnesses, which would encourage medical professionals to keep people healthy and stave off disease. Capitation favors quality, high-value healthcare above quantity.  

Shared Savings & Shared Risk:

In order to achieve Shared Savings, payers must set aside money to cover the expenses of providing and receiving care. Providers who incur costs less than the predetermined budget would split the Savings. Providers would be responsible for covering care-delivery expenses exceeding the predetermined budget under “Shared Risk.” 

The Progression Towards Value Based Care in Healthcare

Value-based Models might offer a better experience for patients and providers, as well as a more secure future for the Medicare Trust Fund, officials recognized prior to the pandemic. Since the early 2000s, the Centers for Medicare & Medicaid Services (CMS), the largest Healthcare Payer in the US, has been implementing Value-based Payment Models.  

These changes have pushed provider groups, which started with how hospitals are paid, to join Accountable Care Organizations (ACOs) and Advanced Payment Models (APMs). Participants in these programs assume a combination of risk and reward for the results of their patient populations. They are rewarded with bonuses if they can show a reduction in costs and an improvement in treatment quality.  

The goal of the program was to accelerate the shift towards Value.  

That transition is taking place among Healthcare consumers. Since they are most suited to assume negative risk, independent providers of care and groups are currently the bulk of those making the transfer to Value-based Care.  

Value-based reimbursement, nevertheless, still makes up a small portion of total reimbursement. It’s interesting to note that Capitation and Fee-for-service Payment Models are increasingly incorporating quality-based pay, incentive-based pay, and mobile payment options. 

Current Challenges for Healthcare Practices for Adoption 

Value-based Care is yet to be implemented smoothly. Modeling Value-based Care with Medicare Advantage is not ideal because commercial groups differ substantially from the elderly population. Employees desire access to options, and buyers prefer to have influence over the specifics of how they implement Value-based Care.   

Likewise, the time an employee stays with a single employer is getting shorter. When members switch employers, the same network of providers may no longer be available. As a result, participants in ACOs and APMs find it more challenging to realize savings. 

Thresholds can act as a roadblock that keeps players from collecting payment benefits. Some APM entities may be discouraged from including specialists in the APM network due to the way the thresholds are structured. APM participation ultimately declines as a result of this structural fault, which inhibits multi-specialty practices and makes it more challenging to align health services.  

Benefits of Value Based Care

Cost Reduction

Recovery is the primary goal of Value-based Care, which ultimately saves money. Consider maintaining a chronic illness like diabetes, high blood pressure, cancer, or obesity. This can be time- and energy-consuming and even expensive in the long run. You may be able to manage these conditions more easily or, in some situations, altogether avoid them with the use of Value-based treatment. It’s possible that you’ll need fewer doctor visits, treatments, and tests, as well as more inexpensive prescriptions. 

Enhanced Patient Satisfaction 

When the emphasis is placed on Value rather than quantity, and prevention rather than the management of chronic diseases, the quality of Healthcare increases and Value-based Care initiatives typically lead to greater overall patient satisfaction with Healthcare arrangements. 

Overall Reduction in Medical Errors 

Medical Errors can be decreased with Value-based treatment. Insurance sponsors, such as major companies, are particularly concerned about Medical Errors because they have observed that a significant portion of their spending is on hazardous or useless therapies. As a result, more businesses are implementing Value-based care to lower Medical Errors. 

Overall Healthier Society 

Value-based Care makes society, in general, healthier and more affordable. Less money would be spent on treating chronic diseases, and there would be fewer hospitalizations and medical emergencies. Costs associated with Healthcare as a whole are decreased as a result.  

Healthcare Suppliers can Align their Prices with Patient Outcomes 

The Value-based Care paradigm, which places emphasis on patient outcomes and reduced costs, can also benefit suppliers. Given the rising cost of prescription drugs, this may be enticing. Stakeholders in the Healthcare sector have discussed basing medicine costs on the Value they provide to patients. 

Keeps Patient Informed 

Patients are kept better informed because Value-based Care is built on shared data in the form of EMRs. The patient can take preventative action and save money, if all the information about their care is available in one location. 

Value-based Care (VBC) represents the Healthcare industry’s efforts to fundamentally shift its payment structure away from the traditional Fee-For-Service (FFS) Model toward alternative Fee-For-Value (FFV) Arrangements. The industry has talked about this pivot for too long with little action, resulting in limited demonstrated benefits for everyone involved. 

In FFS Models, Healthcare organizations receive payment based on the number of services provided, with limited consideration toward the quality of care. Unnecessary services and duplicative tests are often unintended consequences of the FFS Model, resulting in higher patient costs and creating abrasion.  

Value-based Care is Better for Providers 

Value-based Care relieves the hectic pressure of delivering a high volume of services, and allows Primary Healthcare Providers to break the cycle of overreliance on Specialty Care.  

Even though every Provider has experienced some level of exhaustion since the outbreak of Covid-19, the Value-based Model has been more effective at reducing physician burnout. When rewards are based on quality, Healthcare Providers operate at the top of their license and experience the satisfaction of helping patients achieve better long-term health outcomes.  

How Payers can Invest in Value-based Primary Care 

There’s no need for payers to wait for policies that provide better incentives. They can move forward immediately. When they partner with MHRCM to deliver Primary Healthcare for their members, they balance Insurance Risk with Provider Risk. With these, they can safeguard a more cost-effective and caring approach to health.  

MHRCM is positioned to be a strategic partner in the ACO and APM environments, which involve taking on risks. Why? Due to the fact that our tried-and-true Advanced Primary Care (APC) Model enhances patients’ overall health through biopsychosocial care, health coaching, care coordination, and analytics that help target population needs.  

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