Posted by Suman Radhakrishna, MD FACP

Management of quality and cost in healthcare is an ongoing issue. Increased spending does not always equate with improved quality. Value-based healthcare is a new initiative intended to correct these issues. It aims to provide better care for individuals and better health for populations at a lower cost.

The concept behind value-based healthcare is not new in the United States. The Health Maintenance Organization Act in 1973 aspired to provide quality healthcare at a reasonable price by replacing a fee-for-service model with a fixed fee per month model (capitation). Today, the Center for Medicare and Medicaid Services (CMS) is working with healthcare organizations including hospitals, skilled nursing facilities and physicians to provide value-based healthcare while containing costs and improving the health of the community.

The goal of the value-based healthcare model is to maintain a patient-centric approach with all providers striving for the best individual outcome. Ideally, it will enmesh specific illness-related care with preventive care to treat and avoid recurrent disease. It encourages us to take a more comprehensive view, especially of caring for patients who are part of higher-risk populations such as seniors. By doing so, the hope is to improve life expectancy and quality of life for patients. For example, when a patient is admitted to the hospital with pneumonia, treatment for pneumonia, preventive measures such as immunization, and help with cigarette cessation will be addressed. The goal is to return the patient to best possible functional capacity.

Under value-based care, CMS financially incentivizes healthcare providers to achieve improved patient outcomes. For example, if the patient is treated and maintained pneumonia-free for the pre-determined period, a portion of savings will be remitted to the healthcare organization. As a result, healthcare expenditure will drop, healthcare providers will benefit with increased payment, and best of all, patients will have an improved quality of life. It differs from existing models of medical management where the patient might be stabilized for pneumonia and then quickly transferred to recuperative care or a skilled nursing facility if unable to care for him/herself. Under this existing model of care, payments are based on care and levels of care versus the patient’s outcomes.

Another example of a new CMS-sponsored program based on the principles of value-based care is the new Continuing Care Program at CHA Hollywood Presbyterian Medical Center, and it’s unique in that it allows the medical center to care for patients even after they go home. The hospital and its partners provide patient navigators, case managers, and a 24/7 nurse triage line which supports the hospital’s sepsis patients on Medicare for 90 days after discharge. The program is designed to encourage the patient’s recovery at home, help patients stay healthy, and avoid having to go back to the hospital.

We are operating during a period of transition from Fee-For-Service to Value-Based Reimbursement. As more financial risks, better care, and better health are shifted to hospital providers, there needs to be increasing attention toward the value-based reimbursement — which is inevitable for hospitals. Innovative programs like the Continuing Care Program, can help to finance the change that is required for us to deliver higher quality care.