In recent years, the US healthcare system has faced challenges such as rising costs and declining quality. According to the Commonwealth Fund Report, the US has spent 17.8% of its GDP on healthcare yet the US is the only country, among OECD nations mentioned in the report, that doesn’t have universal health coverage, with the lowest life expectancy at birth and the highest rate of people with multiple chronic conditions and an obesity rate nearly twice the OECD average.
However, the emergence of new healthcare technologies has brought about a significant transformation in the industry. These technologies are paving the way for a shift towards value-based care and innovative payment models.
As healthcare costs continue to rise, there is a growing need for a payment model that focuses on improving patient outcomes and reducing costs for both patients and healthcare providers. This is where value-based care (VBC) and alternative payment models (APMs) come into play. In our earlier blogs, we traced the history of VBC, how VBC differs from FFS (fee-for-service) model, and the different payment models that tie patient outcomes to quality. In this blog post, we will delve into the future of value-based care and alternative healthcare payment models and how they are likely to shape the industry in the coming years.
Value-based care is a healthcare model that emphasizes the quality and outcomes of healthcare services rather than the quantity. Its main goal is to improve patient outcomes and experiences while also controlling costs, making it a more sustainable and efficient approach to healthcare. In the coming future, VBC-driven healthcare will be characterized by three core pillars:
Senior healthcare executives will discover that value-based payment models are a critical part of the transition to value-based care. These models shift the payment focus from the conventional fee-for-service model to the quality, efficiency, and effectiveness of care-based payment. The future of value-based payment models will include the following developments:
Shift Towards Risk-Based Payment Models:
In the coming years, senior healthcare executives can anticipate a movement towards risk-based payment models, including capitation and bundled payments. These models will encourage healthcare providers to take on increased financial responsibility for patient outcomes, fostering innovation and cost control.
Evolving Pay-for-Performance Models:
Pay-for-performance models will continue to evolve, placing a greater emphasis on outcome-based incentives. Providers will receive rewards for meeting specific quality measures and will face penalties for underperformance. This will further drive improvements in healthcare quality.
Common Usage of Complex Care Episode-Based Payments:
Episode-based payments will become more prevalent, particularly for specific treatments or surgeries. This method consolidates all costs associated with a care episode, promoting efficiency and coordination among providers.
As senior healthcare executives seek to enhance patient outcomes and reduce costs, alternative payment models will continue to gain popularity. APMs offer various reimbursement methods, promoting flexibility and innovation while highlighting the importance of quality. The future of APMs will encompass the following trends:
As senior healthcare executives seek to navigate the realm of value-based care and alternative payment models, technology will play a crucial role. By adopting a managed SaaS service, providers will depend on a blend of technologies, including the cloud and preferred data technology of their partners. Several technological advancements will shape the healthcare landscape:
Value-driven approach in healthcare, led by value-based care models, prioritizes quality of care above quantity. As technology and data analytics advance, these models offer patients improved healthcare experiences and contribute to the long-term sustainability of the healthcare system. The ongoing and complex transformation of healthcare necessitates a shift toward value-based care and alternative payment models, which represent a promising step forward. Healthcare stakeholders should embrace these changes and persistently strive for an efficient, effective, and equitable healthcare system.