From Fee for Service to Fee for Value: A Valuable Change in The Healthcare Industry

That which is transitioning from fee for service, FFS or provider costs or service reimbursement for practitioner cost based on the number of services done to the value-based care, VBC or payment for outcomes, Pay for Performance P4P where the practitioner is paid according to the value of the outcomes achieved. But what do the two refer to? But what benefits does this shift in emphasis create for healthcare?

However, before going straight into the actual notions, it is necessary to shed some light on the reasons that prompted this shift, i.e.

• Patient Consumerism
• Technological Advancements

Patient consumerism: The fact that patients are now more or less the primary initiators of improvement in improvement in out-of-area services has contributed to this change, and this is as it should be.

In the same manner, improvements in technology have brought about improvements in the data analytical process and the session gathering, as well as record updating, which made it easier to transition from the qualitative FFS method to the quantitatively inclined VBS.

Now, let me try to define what is actually under the term value-based care.

Value-based care or VBS refers to the reimbursement of medical services to providers on the basis of the quality of the care provided in contrast to the number of services as in the FFS model.

In this regard, AltuMED goes deeper into this changing paradigm of healthcare delivery and how it will end up being advantageous to the main end-users; the patients.

Understanding the Fee-for-Service (FFS) Model

Let’s first recap: What do we actually mean by the FFS model?

FFS, or fee-for-service, is the most conventional system of billing that is used in the health care industry. Among them was the reimbursement of the providers’ fees based on the number of medical services that were rendered.

However, as simple and clear as this model may sound, it has several drawbacks:

Higher Costs

As should be expected the FFS model adds up to higher costs per service delivered due to over-reliance on unnecessary procedures to pad revenues.

Repetitive Services

Unfortunately, this model triggers a variety of tests that are not necessary at all, but are suggested merely to earn more money.

Lack of Coordinated Care

Each service stands as an entity and is charged, and addressed, and, in doing so, they lose cohesion between each; this can be disadvantageous to patients who engage in different healthcare services, and many diseases could be undiagnosed or diagnosed wrongly.

The VBS model, in contrast to the above, attempts to solve these loopholes in the traditional FFS model.

The Benefits of Value-Based Care

VBC model has been equally effective especially, in addressing challenges of the FFS model of compensation which has been a major trouble. A few of the notable benefits of the VBC model are:

Cost-Effectiveness

The VBC model tends to generate less revenue and is easier on the pocket for the patients because:

• It is an efficient process and rather organizational-bureaucratic in nature because all the services are delivered in a cumulative and not an individual manner.
• Care integration reduces the likelihood of duplication of tests and diagnostic service deliveries.
• In addition, re-admission rates and emergency visits are significantly low owing to the nature of VBC.

Therefore, when all the added up, the tests and procedural, all the integrated and coordinated care is projected, this results in an incredibly efficient system of the ‘billing’ as compared to the FFS traditional model. Hence, if we are talking about one of the main topics of healthcare management – cost reduction, then let’s applaud the value-based care delivery model!

Increased Productivity

Coordinated care is also a winner when it comes to providing efficient and productive medical service sessions, owing to the following:

• Every diagnostic session is a med-achingly comprehensive undertaking and is as near as I can tell what a patient wants in terms of value and/or need. The care is probably at its highest with patient-patient interactions because each two patient is unique.
• He said that, with Holistic care, the number of visits made by patients is also minimized.
• However, I would like to add overall satisfaction, whether the patient feels happy after the treatment or not, and whether the patient has positive thinking or not.

Proactive, team-oriented approach

Needless to say with the introduction of the value-based care model, the change is all-pervasive and profound. Especially in terms of:

• The care being a well-coordinated one helps to avert many conditions and the over-arching care approach helps to avert chronic ones.
• And, one of the most important advantages is a patient record – it looks very organized, and also you can easily find it if it is needed to refer to it.

According to the research conducted in JAMA Internal Medicine, value-based reforms contributed to large declines in hospital readmissions.

As such, it would be possible for us to argue that value-based care has many benefits beyond the fee-for-service care model. All these boil down to the fact that the practical aspect impacts the patient, the aspect of patient consumerism, and in the broader perspective the healthcare industry.

Impact on Various Stakeholders

Now that we have well established the benefits of value-based care in contrast to FFs, it is pertinent to see how the newer model impacts various stakeholders.

Patients

The greatest beneficiary of this model is the patient itself and this has been propounded throughout the analysis. This model does cover the essential aspects of care and is also more economical as compared with other models of care. In other words, the patient is receiving a better quality of healthcare, at the cost of fewer reimbursements in his/her pocket.

It has a long-term impact on the frequency of visits in growing older and the features of the VBS in combating chronic diseases.

Therefore, regardless of the short-term or long-term effects, the VBS model is ideal for patients.

Medical Practices/Healthcare Systems

It would also be rather surprising to find out how the VBC model benefits other facets of medical practices as well.

This leads to improved patient satisfaction as much as there is enhanced coordination in the provision of health care services. This in return assists in preserving brand loyalty and reputation in the midst of increasing competition in the market.

Last but not least, better care brings about eventual improvement to the general well-being of the healthcare service industry.

Medical Billing Companies/Medical Billers

Statistically speaking, improved patient outcomes mean a reduced number of bills to claim. Reduction in claims, in effect, means a reduction in denials and claim submission errors. VBC reduces lost time and risk of revenue loss for medical billing companies.

Coordinated care can also be billed in bundles or collectives to save time and logistics.

Society

This has implications for the general society because improved health status is brought into being. Yes, huge proportions of health costs are slashed and the rest of the money can be directed to enhancements, for instance, rehabilitation or recreational facilities.

Not to mention the overall positive changes that can come into society once better health has been attained.

Implementation of Value-Based Care

Now the question arises: how may value based care be applied and evaluated so as to optimize the effects observed?

Digital Care

Technology impacts a great number of tools that can be effectively put into practice to enhance the patient’s data management and storage, the patient’s condition, and treatment plans. Thus, other related activities like appointment setting, statement generation, and the process of accessing the individual’s health record may also be employed to enforce the model. Likewise, an improved analysis will be useful when it comes to the analysis of patient data, identification of the gaps in the care that might have been provided, surveys, and reaching out to the patients even before they get to consult the doctors.

Wearable Technology

Likewise, remote patient monitoring can also assist with the VBC plan since patients can use technologies that involve continual or expected readings like the electronic professional fitness trackers and smartwatches they have today.

With the proper capturing of data from the wearable technology, physicians will be in a better position to handle the patient health data and also assist in decision making with regard to the health of a particular patient.

Telemedicine Tools

Likewise, telemedicine can similarly be used in adopting the coordinated model since this can easily work for long-distance patents patients from remote areas or patients with busy or tight schedules.

In the present day, therefore, there are available technologies in medical service delivery that enable the provision of value-based care over the Internet. This also results in reduced complexity that will be required of the doctors since they will be able to attend to many patients without much paperwork.

Dr. Elizabeth Rosenthal, CEO of Kaiser Health News: "The shift toward value-based care is all-important, in an attempt to realize better patient outcomes and cut costs, by giving such decision-making authorities to health care providers."

Conclusion

In a nutshell, it can be summarized:

• Value-based care is noted however, it is imperative that we weigh it against FFS and acknowledge that the benefit ratio of Value-based care is bigger than FFS.
• The FFS model raises the expenses and brings back such issues as the repetition of the control and the lack of a unified strategy.
• The VBC does so, nonetheless, since it is oriented on the sectors of costing, integrated care, and prevention.
• Overall, the VBC positively impacts all the major stakeholders: clients, healthcare systems, billing companies, and societies in the health departments and within the society at large.
• The VBC model can realized using information technologies and wearable devices and during telemedicine sessions.
• Thus, the only logical progression from this state of affairs as far as the identified benefits are concerned is to go for VBC since the advantages associated with the VBC are generally higher than those of the FFS.
• Based on the bigger picture of healthcare providers, it is time for them to embrace this model.