Global healthcare systems are nearing their breaking point due to the increase in the incidences of chronic diseases in an ageing population, and the rise in healthcare costs due to innovative technologies and drugs. Add to it the huge variance in treatment, outcomes, and prices across different healthcare centres, and the complexities only complicate the entire system further. There is an immediate need to seek solutions that drive healthcare systems from siloed and wasteful care delivery to more patient-centric and productive healthcare. The answer perhaps lies in value-based healthcare.
What is value-based healthcare
Value-based care came into being as an innovative healthcare delivery framework by Harvard Economist Michael Porter that focuses on the quality of care instead of the quantity of care. In the traditional model, healthcare providers are on a “pay per use” type of compensation structure, where regardless of whether a diagnosis or procedure is successful or not, and whether or not the steps taken are considered a best practice, the payment still needed to be done. Value-based healthcare model caters to what the patients value and allocates resources according to the health outcomes delivered by the system. It can be defined as model based on compensation for outcomes, thus aiming to achieve better patient outcomes at lower costs of care.
How does it work?
The value-based healthcare model is a proactive approach to medicine that determines the provider’s payment on the ‘value’ delivered (or the outcome of the care), not on the number of visits or procedures completed.
There are two ways value-based care can deliver ‘value’ to patients’ wellness:
- Decrease the cost of services while still providing the same outcome
- Enhance the outcome of well-being without any increase in the cost of care
With a data-driven approach that analyzes current treatment plans and reviews where the hospitals, health insurance, and other services are spending money, healthcare providers can redesign services to provide this value.
The Essential building blocks
To accelerate and bring scale to value-based care, there are some essential aspects that need to be prioritized:
- Standardized Measurement through health informatics: A key step towards value-based care is the standardized measurement of outcomes for a particular patient, consolidating it on a population segment, and applying the insights to improve outcomes at various care stages for similar patients. With digitization of healthcare gaining momentum, the opportunity to steadily integrate healthcare informatics, and achieve this standardization now looks greater than ever before, especially because current health systems defined by silos and legacy IT systems didn’t allow such integration. Health informatics connects clinical processes and workflows and with the right configuration and data visualization capabilities, informatics can enable healthcare professionals interpret information from multiple sources and make real-time decisions.
- Interoperable Data Platforms: For high impact and scalable health informatics, open digital networks are a must to fuelling further innovation and research. The seamless generation and exchange of data between systems, processes and stakeholders is essential for value-based care.
- Payments Reform: A significant reform that needs to happen is the transition from fee-for-service model that most professionals in the healthcare system have so far relied upon, to the value-based payment model. There is considerable ‘value’ in the new model and a pressing need to make healthcare more sustainable, so an innovative payments system that shares the risk and aligns incentives across care pathways and providers, needs to be designed.
Impact of value-based healthcare
The value-based healthcare has numerous potentially impactful results:
⦁ Driving Clinical Excellence: Integrated health informatics can support medical staff in their decision-making, teamwork and communication.
⦁ Higher Operational process efficiency – With health informatics, system administrators can analyze and optimize almost every operational aspect of the health system.
⦁ Systematic measurement of patient-reported outcomes – This is critical to drive the performance-based payments and to incentivize much needed gains in quality, safety, and patient-centricity.
⦁ Significant cost reductions – Through integrated health informatics, patients can save on unnecessary emergency visits, and eliminate unnecessary tests by using data to analyze and create best practices and “care paths”. Thus, co-ordinated care from medical teams reduces the health care costs.
Ultimately all healthcare stakeholder groups need to co-operate and collaborate to make widespread adoption of value-based healthcare possible. Data platforms, regulatory frameworks, clinical skills, training and payments reform must each be managed in a comprehensive and progressive approach to healthcare reform.