Value-Based Care
The fragmented U.S. healthcare delivery system and financing structure creates a host of complex challenges that can lead to misaligned incentives. Services, treatments, and products are delivered by numerous entities (physicians, medical centers, ancillary businesses, free-standing retailers) and financed through various programs (employer-sponsored insurance, individual plans, Medicare, Medicaid/Children’s Health Insurance Program, Veterans Health Administration).
This system has developed alongside a predominant fee-for-service (FFS) reimbursement model, which compensates providers for the individual service or product delivered. However, public and private-sector efforts are slowly transforming our nation’s piecemeal reimbursement model to financially reward and reflect the importance of delivering coordinated and integrated care that improves the health of the whole patient. Value-based care entails an increased focus on delivering high-quality coordinated care while reforming payment models to not simply pay for itemized services but to reimburse providers for outcomes and the holistic treatment of a patient’s overall condition or health.
Key challenges in this evolution towards value-based care include:
- Misaligned incentives that prioritize volume over value, potentially leading to higher costs.
- Lack of collaborative treatment and coordinated care across different healthcare entities.
- Insufficient focus on improving the overall health of individuals beyond treating specific symptoms or conditions.
- Complex regulatory and operational frameworks that are modified frequently, introducing burdens and unpredictability that hinder the transition to value-based models.
- Access and cost challenges exacerbated by geographic and health differences.
To address these challenges, the healthcare system must undergo a more comprehensive shift in its reimbursement model and incentive structures, with value-based care models becoming the norm rather than the exception. This systemic transition requires coordinated efforts across legislative, regulatory, and industry leaders to realign incentives, enhance predictability, promote collaboration, and ultimately improve patient outcomes while controlling costs.
Solutions
HLC champions private sector value-based care initiatives and supports federal efforts to realign financial incentives and reform the historic fee-for-service reimbursement model that has been the mainstay of the U.S. healthcare system. Shifting this payment policy will drive greater efficiencies in patient care delivery, reduce unnecessary costs, reward collaborative treatment, encourage coordinated care, and improve individuals’ overall health.
Specific areas for policy action include:
- Extending telehealth and Acute Hospital at Home waivers.
- Realigning incentives to reduce fraud, waste, and abuse.
- Modernizing the Physician Self-Referral Law and Anti-Kickback Statute.
- Improving alternative payment models (APMs) to better serve rural, underserved, primary care or specialty practices.
- Leveraging learnings from the Center for Medicare and Medicaid Innovation’s (CMMI) value-based models to achieve savings and increase participation.
- Updating the Congressional Budget Office’s (CBO) modeling approach to recognize and incorporate long-term savings from preventive health initiatives.
- Improving data integration and interoperability to assess success and make progress towards addressing social drivers of health (SDOH) to improve health outcomes.
- Expanding electronic prescribing of controlled substances.
