Value-Based Care: The Impacts on Providers and RCM


Value-based care is important not only for patients, but for providers, too. What is it, and how does it compare to the traditional fee-for-service pricing model?


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With an increasing push for value-based healthcare models, moving away from a quantity-of-services strategy seems inevitable. Value-based care (VBC) rewards the quality of service, patient experience, and healthcare outcomes. It won’t be a simple switchover, but it will ultimately benefit your patients’ health and your bottom line.

What is value-based healthcare?

The traditional model of healthcare services and revenue is fee-based, which means payment is based on the quantity of services doctors and other medical staff provide, rather than the quality of those services. The value-based model of healthcare means payment is set according to the quality of service and patient outcome. The VBC model encourages providers to consider the most effective and efficient strategy for patient care rather than what services they could provide to maximize revenue. The goal of this model is better outcomes for individuals, better population health, and lower costs.

What VBC means for providers, patients, and payers

With the fee-for-service (FFS) model, providers receive payment for the number of patients they see and services they provide, such as office appointments, lab tests, or procedures, regardless of the outcome. Unfortunately, this model can have negative consequences for both the patient and payer.

The VBC model, on the other hand, offers incentives above the traditional fee schedule, based on quality metrics and outcomes. This means less waste on unnecessary and expensive tests. The VBC model:

  • Focuses on preventive care to reduce high costs of emergency treatment and chronic conditions
  • Ensures provider, patient, and payer goals are aligned with patient well-being
  • Requires a team-oriented approach, exchange of data and information, and coordination of care
  • Increases patient engagement, which affects bottom line

In sum, adopting a VBC model shifts the priority, whether intended or not, from financial incentives to optimal patient care.

Shifting to a VBC model

Although there are numerous benefits to a VBC model, many providers are reluctant to make the shift because they are concerned about the effect on their cash flow. Changing how a medical facility or practice receives payments can create a temporary financial risk until the new processes and procedures are fully adopted and patient accounts have transitioned to the new pricing model. A value-based care assessment can help teams determine which accounts to prioritize to minimize the impact from the transition. Most likely, it will mean gradually phasing in new pricing schemes, with a period of time where cost of care will be a mix of VBC and FFS.

Perhaps the biggest challenge is measuring quality to determine pricing for VBC services. Unfortunately, there is no easy answer or clear calculation here. This effort will entail trial and error to devise a payment scale that is equitable for all parties involved. Artificial intelligence, machine learning, and data analytics can provide insights to support pricing discussions.

Shifting from an FFS model to a VBC model is a substantial change. Making the change will require not only a different mindset and billing process, but also an investment in a robust IT infrastructure and sufficiently trained staff to ensure a successful transition. All of this can be daunting for internal teams who are already constrained by a lack of resources and working at maximum capacity. With the help of an experienced partner like TruBridge, facility teams can plan, adopt, and maintain a VBC model with greater ease.

To learn more about the benefits of a VBC model and how to incorporate this strategy into your healthcare facility, visit us at TruBridge.