• Jorie Healthcare Partners

Value-Based Healthcare: Revolutionizing The American Healthcare Model

The requirement for a switch in the nature of the American healthcare industry cannot be ignored where quality can prove just a big challenge as cost. The long-standing argument that higher quality of care requires higher costs may be rendered redundant if one considers a shift in the right direction and in the manner to the value-based healthcare model that aims to increase health outcomes in a more efficient manner that focuses on patients health outcomes rather than small-term profits.

A balance between creating incentives for performing quality services that help patients acquire better and more effective healthcare needs to be struck, given the American per capita spend on healthcare, which amounts to the highest in the world out of all subsequent developed nations. Unfortunately, it still ranks the lowest when it comes to the overall health of its citizens. This can be attributed to the performance or output driven healthcare model that is currently employed by most medical centers.

A 2017 study conducted by the Commonwealth Fund revealed that the cost of healthcare has risen far more in the United States than any other developed nation since 1980. Despite this, the same nation ranked amongst the lowest when it comes to contributing factors like ‘Administrative efficiency’, ‘Access to healthcare’, ‘Care Equity’, and ‘Outcome’ in the same study.

Understanding Why

The disparity between expense versus performance appears troubling as USA has the highest per capita expense (which reached $3.6 trillion in 2018) amongst all high income nations. Yet, it ranks lowers when it comes to the overall performance of its healthcare infrastructure.

To grasp the reasoning behind its causation, it is integral to understand the key differences between all other developed nations:

The American model of healthcare is the only one amongst these nations without a universal healthcare plan in place. This is the primary cause of although it has taken steps to changes that such as the introduction of the affordable care act (ACA).

The healthcare system established in the United States is largely dependent largely on ‘Volume-Based Payment’ models, which encourages a high volume of service visits. This includes healthcare provider’s visits, medical test visits, medical procedures and pharmaceuticals.

In such situations, healthcare practitioners are not compensated for coordinating patient care or taking other factors in to account such as the patient’s socio-economic situation and this then becomes the main cause of patients having to deal with high (and in many times, out of pocket) expenses on medical treatments. Treatments are more often reactionary, which means that patients get treated after they have developed illnesses or complications.

A considerable section of the population are more often than not, unable to afford insurance plans that cover pre-existing conditions: the figures showcase 6 out of 10 people. Naturally, such out-of-pocket expenses are a great burden on the patient further reducing access to healthcare.

The system also places a great amount of burden on companies that provide health insurance benefits to their employees. Pre-existing conditions and reactionary healthcare make it difficult for business owners to choose an effective and encompassing healthcare plan for its employees.

Finally, a lack of direction and oversight of commercial insurance payers becomes apparent when one considers this example: patients in the US spend up to $910 billion on redundant tests. Premiums continue to soar, yet continue to evade the pockets of the providers. A case of conflict also tends to arise between payers who want to decrease encounters for financial viability and providers who need to increase it, resulting in the patient getting stuck between a rock and a hard place without ideal coverage.

Ultimately, this system focuses on generating maximum revenue and fails to focus on overall health outcome.

A Viable Solution:

Value-Based Healthcare (VBH) aims to derive maximum performance in terms of health outcome of the patient per every dollar spent thereby focusing on the true health objective, which is increasing value. The module primarily follows a ‘Preventive Healthcare’ module i.e. the focus of this module is to prevent patients from getting sick or developing major illnesses. Hence, it requires a more proactive approach to healthcare.

To implement value-based healthcare, a full cycle of care is required to be set in place that is handled by both health providers and patients.

Value-based healthcare compels a more collaborative approach between healthcare providers to provide treatment to patients. The latter are not left alone to navigate the healthcare system. Instead, a team of healthcare professionals who will help their patient in acquiring the right medical attention which would automatically result in fewer referrals is allotted to the patient. This focus will continue in perpetuity the as a measure for preventive measure. This initiative will prove to be invaluable to patients with chronic or pre-existing health conditions which accounts for nearly 90 percent of their health expenses.

Who is in this team of professionals?

These healthcare professionals consists of a multi-disciplinary collaboration. This includes case managers, physicians, administrators, therapists, volunteers, advisors and more. Not all members of this team provide direct medical care and consultation. Instead, their collective focus will be on building a continuum of care and wellness strategies tailor-made for each patient. The purpose of this proactive and collaborative approach is to provide preventive healthcare.

Executing Value Based Healthcare:

“The concept of value-based healthcare questions the need of aggressive, preventive or curative interventions which cost a lot but have few outcomes, while being ineffective and inefficient medical practice.”

The VBH model aims to effectively reduce overall cost of healthcare while improving the patient’s experience, by relying on a collaborative approach between multiple disciplines: Firstly, patients with chronic illnesses or pre-existing conditions are identified are allotted case managers.

These case managers are responsible for identifying the patient’s needs and designate a set of healthcare professionals that specialise in providing care for illnesses or potential illnesses related to the patient’s condition.

From this point, a tailored health wellness plan is put in place that is best suited for the individual patient. This coordinated wellness plan could include preventive check-ups, scheduled therapy, tests, and other (mostly) preventive care treatments and tests that keep the patient relatively healthy and reduces the need of emergency treatments or any major procedures.

Each designated case manager conducts regular follow-ups with the patients to keep track of their health and to make sure that each patient is able to properly navigate through their appointment and check-ups with their assigned healthcare professionals.

In this model, the patient (in a significant way) is also a part of the team. They are also responsible for following the diet and other wellness regimes that their allotted case manager or therapist would designate for them. The patient is also responsible to regularly report and developments in regards to their health.

Primary healthcare providers such as doctors also greatly benefit from this model as their workload is also greatly reduced. They no longer have to extensively track a patient’s medical records. Now patient’s case manager along with a team of healthcare professional will coordinate and collaboratively focus on the patient’s wellbeing.

How does it improve healthcare for the patient?

· Through guidance, individuals find it easier to navigate through the healthcare system.

· More individuals are informed about preventive healthcare options like colonoscopies, mammograms, and vaccinations.

· Preventive healthcare increases the chances of detecting health risks before they can develop into health complications.

· Better control over chronic illnesses and pre-existing conditions.

· Fewer requirements of major medical procedures.

Adopting the new VBH model

Adopting this model brings benefits to both sides of the aisle. Patients benefit from reduced out of pocket expenses for redundant tests and major medical procedures. Doctors benefit from it as they now get their burden shared with a team of healthcare professionals. Hospitals benefit from it as more and more people participate in this medical program which now becomes more inclusive and inexpensive.

Overall, this new system brings the focus of healthcare into keeping people healthy, rather than just treating people after they get sick. This is the innovative new model that will bring costs down and bring value back to the healthcare.

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