Transitioning from Fee-for-Service to Value-Based Care

The United States healthcare system is undergoing an aggressive reform push to eliminate inefficiencies and maximize existing scarce resources. The shift towards value-based care is one of the highlights of this healthcare reform agenda.

Traditionally, healthcare providers in the United States were primarily motivated by the volumes and profits, ignoring the nature and quality of outcomes. Today, healthcare providers are encouraged to seek resource efficiency while improving the quality of care and patient outcomes.

Value-based care is defined by a philosophy to expand access to care and create an optimal healthcare system. It differs from fee-for-service in that it redefines the principles that guide medical practice. Specifically, value-based care calls attention to aspects of care such as quality and proactive interventions that help manage the excesses typical to the health system.

For instance, value-based care is founded on the realization that reactive health interventions are expensive and result in poor care outcomes because diseases are at an advanced stage. Value-based care encourages proactive and evidence-based interventions that improve costs and patient outcomes. In addition, value-based care has been shown to compel healthcare providers towards inter-professional collaboration and the integration of care practices.

Despite the vast advantages envisioned from the transition to value-based care, there is a need to invest in resources that enable the model. One of the challenges to value-based care is the presence of resource limitations that challenge the implementation of tools critical to value-based care’s success. For instance, aspects of value-based care such as medical homes, accountable care organizations, and capitation rely on sufficient financial and human resources access.

These challenges are made more difficult by the expected shortage of nurses who make up the largest workforce in healthcare. According to the US Bureau of Labor, an estimated 11 million nursing professionals are needed to avert a looming shortage. The Association of American Medical Colleges has also raised similar concerns indicating that by the year 2034, the health industry could contend with physician shortages as high as 124,000. These concerns create the need for state and non-state actors to step in and help ease the resource deficiencies that challenge the industry.

Despite the foreseen challenges, value-based care has numerous advantages. First, the model’s proactive nature means that disease states are identified before they advance to more complex stages. This way, value-based care helps to minimize patient suffering.

Again when healthcare providers prioritize cost-efficient care strategies such as prevention, there are fewer resources used in the course of care provision. This efficiency substantially improves the bottom line by eliminating resource wastage in re-admissions and high drug subscription costs. Most importantly, value-based care aligns with healthcare’s original mission to heal and improve society’s wellbeing. The shift to value-based care re-imagines the healthcare industry’s mandate by prioritizing value and quality over profit maximization.

Since value-based care seeks to operationalize processes and systems that improve patient outcomes and facilitate the efficient use of healthcare resources, it will help reverse the inefficiencies created by years of a health system founded on profit. While some might view value-based care as the beginnings of a social healthcare system, the trade-offs in social value are evident.

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