Value-Based Healthcare: Reshaping Medicine

Written by: Cheryl Reifsnyder, PhD and Auren Weinberg M.D., M.B.A.

Value-based healthcare is a framework for healthcare delivery and payment that rewards healthcare providers based on patient health outcomes rather than the quantity of services they provide. Research shows that this healthcare framework can provide numerous benefits, such as lower healthcare costs, improved quality of care, and, most valuable, improved patient outcomes. Value-based healthcare has the potential to help overhaul the American healthcare system-which is clearly in need of transformation.

The U.S. healthcare system is plagued with problems, both financially and medically. The high and rising costs of healthcare are making medical care less and less affordable for the average patient; meanwhile, an estimated 15% to 30% of healthcare spending is considered waste, going to things of little or no value to patients while further contributing to healthcare's high costs. Despite these high expenditures, the U.S. has the lowest life expectancy among nations with similarly high incomes, such as Canada and the United Kingdom. The U.S. also has the highest chronic disease burden, the most hospitalizations for preventable causes, and the highest rate of avoidable deaths.

However, the U.S. healthcare system is increasingly implementing value-based healthcare. More than 60% of healthcare payments in 2020 included some quality and value component; 49% of practices responding to the American Academy of Family Physicians' 2022 value-based care survey reported participation in some form of value-based payment, and 18% reported developing the capabilities to do so. This shift to value-based healthcare promises to reshape the future of medicine.

Value: the primary focus of value-based healthcare

The primary focus of-the "value" in-value-based healthcare is improving patient health outcomes. Through this goal, value-based healthcare is transforming the practice of medicine. This goal will be accomplished via changes in how patients receive care-but which changes will move healthcare toward this goal?

Research into organizations that have achieved improved patient health outcomes, often at lower costs, has revealed several strategies associated with success:

1. Caregiver teams: Patient care is delivered by an interdisciplinary team of healthcare providers working together to design and provide comprehensive solutions to patient needs.
2. Focus on preventive care: Practices work to make healthcare proactive rather than reactive, preventing problems before they start.
3. Identifying and assisting high-risk patients: Practices work to identify and understand those patient segments whose health and related circumstances consistently create healthcare needs.
4. Evaluating progress: By evaluating health outcomes, costs of care, and other data related to patient care, practices can assess progress and drive ongoing improvement.

Value-based healthcare also provides many secondary benefits beyond improving patient health outcomes. These include reduced healthcare spending for both individuals and society overall; fewer medical errors; more engaged, better-informed patients; promotion of patient healthy habits; increased patient satisfaction; and better care efficiencies.

These benefits are also valuable-in fact, many of them circle back to influence the primary goal of improving patient health outcomes. For instance, decreasing healthcare costs has the potential to improve patient access to care, while reducing medical errors enhances patient safety. Both of these benefits obviously help improve patient health outcomes. More engaged, better-informed patients are more likely to participate in their treatment decisions, which research shows is also associated with improved health outcomes.

However, descriptions of value-based healthcare sometimes give the impression that it focuses primarily on reducing costs, improving quality of care, or improving patient satisfaction. These factors cannot be the primary focus of value-based healthcare because, on their own, none of these are sufficient to change patient health outcomes directly. This is why value, in terms of improving patients' health outcomes, must remain the primary goal of value-based healthcare-as well as our focus in this article.

Team-based care

The American Medical Association identifies team-based care as one of the essential components of an "ideal" high-value healthcare system, stressing the importance of a medical team with a clear, shared vision for patient care. An integrated, team-based approach to patient care is one of the essential elements of value-based healthcare.

By utilizing interdisciplinary caregiver teams, value-based healthcare can better deliver comprehensive solutions to patients' needs. The patient's care team supports the patient throughout their healthcare journey with a focus on prevention, wellness strategies, and care coordination-priorities of particular importance for those patients needing to manage chronic conditions.

Patients' care teams may also include other types of professionals in addition to physicians, such as case managers, educators, psychologists, health coaches, and others. Not all team members provide patients with direct medical care, but they work together with patients and caregivers to help identify and address each individual patient's healthcare needs. Care teams can also help patients meet their healthcare goals by coordinating with community resources such as nutritionists, social workers, and mental health counselors.

Team-based patient care frequently delivers a secondary benefit as well, in that it helps improve patient engagement. The Center for Advancing Health defines patient engagement as "actions individuals must take to obtain the greatest benefit from the health care services available to them". Successful value-based healthcare requires both effective coordination of patient care (encouraged by the team-based approach) and patients who are involved in improving their own self-care. As the healthcare system increasingly shifts to value-based care, patient engagement is emerging as a critical element in effecting change.

A growing body of evidence shows that patients with higher engagement levels have better health outcomes than less engaged patients. Engaged patients are more likely to participate in preventive health-related behaviors such as prophylactic screenings, healthy eating, immunizations, and checkups. Among patients with chronic diseases, those more engaged are more likely to follow treatment recommendations and perform regular self-monitoring. On the other hand, less engaged patients are nearly 3 times as likely to have unmet medical needs and twice as likely to delay medical care.

With its focus on making the entirety of a patient's care information accessible in a single location, team-based care helps patients stay better informed about their health, wellness, and treatment options. Research also shows that value-based healthcare teams are more likely to be aligned with patients' health motivations and more likely to discuss treatment plans with patients. The open communication and information sharing characteristic of team-based careenhance patient trust and engagement, helping empower patients to engage in active self-care between visits-critical elements for the success of preventive care strategies and care management programs.

Preventive care

Preventive care is another core element of value-based healthcare. This represents a sharp redirection from the current U.S. healthcare system, in which a comparatively small portion of healthcare funding goes toward preventive care and promoting healthy patient lifestyles. However, addressing issues such as patients' lifestyle choices and factors affecting social determinants of health (SDOH) has been shown to have a greater impact on overall population health than sole reliance on reactive healthcare delivery.

For this reason, value-based healthcare contracts frequently place greater emphasis on preventive interventions than traditional fee-for-service contracts, with the goal of preventing patient health problems before they begin. Improving patients' health outcomes is highly dependent on improving their overall wellness; patients' wellness, in turn, can be significantly influenced by the use of preventive screenings together with encouraging healthy patient habits while discouraging unhealthy habits such as overeating, excessive alcohol consumption, and smoking.

Identifying and assisting high-risk patients

In order to deliver preventive care to patients who would benefit most, practices need to identify high-risk patient segments-those patient groups whose health, economic stability, education, language, or other factors or circumstances consistently contribute to greater healthcare needs.

Such factors are commonly known as social determinants of health (SDOH). SDOHs have become a valuable tool in value-based healthcare because they can help providers identify high-risk patients for intervention. In some cases, reimbursement for value-based healthcare may depend on identifying SDOH populations. Many value-based healthcare programs reward providers for administering preventive screenings and require that the rates for these screenings be comparable across all relevant patient populations.

As upstream issues that can interfere with individuals' healthcare, SDOHs are responsible for many health inequities. They can have a substantial impact on patients' health and well-being. SDOHs are also strong indicators of disease complications and patient mortality. This is why value-based healthcare programs often seek to improve patient adherence to care by targeting SDOH. Increasing evidence demonstrates that SDOH intervention programs can reduce the cost of care while improving patient outcomes.

SDOH risk factors are also often associated with poor health literacy among patients. The government defines health literacy as "the degree to which an individual has the capacity to obtain, communicate, process, and understand health information and services in order to make appropriate health decisions." Health literacy directly impacts patient health outcomes, making it a critical consideration in value-based healthcare.

Poor health literacy affects nearly 9 out of 10 adults. Research shows that patients with lower levels of health literacy tend to have poorer health, higher hospitalization rates, lower medication adherence, lower use of preventive care, more medication errors, and overall higher healthcare costs, as well as having a higher mortality risk. Poor health literacy is a stronger predictor of poor health than a patient's age, income, education level, employment, or race.

Evaluating progress

To assess a practice's success at implementing value-based healthcare, you first need to know:

• What to measure
• How to evaluate current progress
• Where to look for areas for improvement

Several organizations have provided guidelines for measuring healthcare quality. The Agency for Healthcare Research and Quality lists 6 domains of healthcare quality that can be assessed to evaluate quality of care, whether it's effective, efficient, timely, safe, patient-centered, and equitable. The American Medical Association also lists 3 elements of quality required for high-value care: quality in patient outcomes, safety, and service. The National Academy of Medicine describes high-value health care as safe, timely, effective, efficient, equitable, and patient-centered (STEEEP), which the Institute for Healthcare Improvement has translated into the Triple Aim of:

1. Providing better care for individuals
2. Leading to better health for populations
3. At lower cost

Whichever specific metrics you choose to track, your practice will require some type of Quality Analytics solution to track and evaluate the data for your analysis. For example, one way to optimize value-based healthcare programs is by identifying SDOH risks in your patient population. Veradigm Payer Analytics is a solution that provides analytics for identifying targets for improvement under value-based contracts or programs. It provides data that empower clients to take action to improve both patient health outcomes and financial outcomes.

Veradigm Payer Analytics stratifies patients by SDOH community level and risk factors. It enables you to track data such as emergency department (ED) utilization, inpatient treatments, and patient readmissions after treatment. This information empowers your practice to take targeted actions such as identifying SDOH risks for existing patients, reducing inappropriate ED visits, and improving 30-day unplanned readmission rates. By prioritizing screening for SDOH risk factors at the individual level, you can gain a more complete view of patient care and needs.

Veradigm: Supporting the shift to value-based healthcare

The nation's shift to value-based healthcare promises to transform the practice of medicine-improving patient health outcomes by making changes such as using caregiver teams to deliver patient care, putting a greater focus on the delivery of preventive care, and working to identify and address SDOH, low health literacy and other risks to patient health.

Veradigm is dedicated to supporting this shift to value-based healthcare, providing innovative solutions that promote value-based care initiatives for life sciences, health plans, healthcare providers, and most importantly, the customers they serve.

Contact us today to learn more about how Veradigm can support your shift to value-based healthcare.

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