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Value-Based Care

With the ultimate goal to improve the health of populations, enhance the experience of care, and reduce the cost of care, population health management, and alternative payment models have been at the forefront of the value-based evolution.

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But the transition to value is challenging. Many healthcare organizations are hesitant to take on financial risk, especially when margins are so thin, and payers are slow to roll out value-based care (VBC) arrangements and managed care contracts. Pivoting away from historical fee-for-service (FFS) reimbursement models and successful transition to value-based payment models from FFS requires a collaborative effort between payers and providers with a focused effort across three essentials pillars:

  • Payer Contracting: Fair and clear contracting terms and incentives are a win for payers, health systems, employers, and patients.
  • Operational Transformation: Transitioning from traditional FFS care delivery models to value-based arrangements often requires significant changes to existing clinical workflows, resource allocation, and access to key data. These changes are essential to unlock the financial upside in value-based care delivery models.
  • Compensation Alignment: Compensation plans must evolve to recognize the provider behaviors that best achieve the targets of a VBC model, including incentives tied to both effort and results through clear attribution methods.

Successful VBC Creates a High-Quality System of Care with Aligned Financial Incentives

Health systems should approach the transition with a “slow but steady wins the race” mentality and strategically identify the services, programs, and markets that are most likely to succeed under a VBC model.

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