Value-based purchasing (VBP) refers to a healthcare payment model where insurers pay practitioners and providers depending on health outcomes. In VBP, hospitals receive reimbursement according to their effectiveness in improving their clients’ quality of life. VBP is similar to value-based healthcare, where medical and nursing institutions focus on patient outcomes instead of the volume of service rendered. These methods are contrary to the capitated approach. In these, physicians received their payments relative to the volume of services that they provided. As the focus of hospitals is shifting from the quantity of service to the outcomes, more care facilities are adopting value-based purchasing. However, VBP is still growing and must evolve to meet diverse patient needs and adapt to structural and organizational differences in hospitals. Thus, it is essential to discuss the future of VBP in healthcare. The adoption of value-based purchasing will attract more attention towards community demographics, promote a shift from capitated approaches, and alter the operation of care facilities.
Firstly, community demographics will be critical considerations in the development of VBP programs. The characteristics of individual communities are essential determinants of their health wellbeing and outcomes. Thus, it is impractical for hospitals and insurers to use a general quality measurement in the nation. Healthcare stakeholders will have to develop measurement systems that consider the race, sex, age, employment, community resources, and economic status of a community before developing their outcome goals to drive VBP programs (Casto, 2018). For instance, the age of a society affects the kind of diseases and conditions that the local care providers must treat. Providers that handle the elderly will spend more resources on palliative care compared to those who treat younger individuals. Low-income communities are also more vulnerable to specific health conditions. Developing a blanket VBP scheme will thus distort the payment system. Therefore, the wholesome adoption of VBP will mandate healthcare practitioners to create different plans for diverse communities.
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In the future, more healthcare organizations will adopt VBP initiatives, making the capitated approach less common. In traditional systems, hospitals had fewer incentives to promote patient outcomes. The current care environment is changing, and practitioners must be accountable for the total costs of care and their quality of services. Such trends are forcing a morph into VBP programs, which have specific methods of measuring patient outcomes. Besides, government agencies are developing laws and policies that shift the attention of caregivers from quantity to quality. For instance, the Department of Health and Human Services (HHS) strives to reimburse hospitals according to the quality of services that they offer clients. The government began moving towards VBP in 2008 by passing the Medicare Improvements for Patients & Providers Act (MIPPA) (Hodgin, 2018). The policy was essential in paving the way for other quality-based reimbursements such as End-Stage Renal Disease Quality Incentive Program (ESRD-QIP) (Hodgin, 2018). The program was the first initiative that Medicare took to move towards quality consideration. Insurers considered quality measures and patient outcomes when paying for dialysis.
Value-based programs will also drive the structure and operation of healthcare facilities. As the government implements VBP as consideration for reimbursement, practitioners must implement initiatives that improve patient outcomes (DiChiara, 2015). Thus, it will be essential for hospitals to change their mode of operation in favor of teamwork. Collaboration in care provision and focusing on population health promote excellent patient management and increases the sensitivity to the evolving needs of consumers (Burwell, 2015). Care facilities will adopt teamwork due to the numerous benefits that it offers. These include higher patient satisfaction, better implementation of safety initiatives, and effective use of resources. Care facilities also have more incentives to focus on the improvement of population health. Reducing the focus on population health has been a significant concern in the health sector. VBP will solve such issues since hospitals have better chances of improving individual outcomes if they consider general population dynamics.
The development and adoption of new payment methods will also become a foundation of VBP. Under new regulations of healthcare reimbursement, organizations must adopt new payments methods that facilitate value-based services. As a case in point, the HHS department implemented new payment mechanisms in April 2018. These developments aimed to shift care providers from service-based to value-based reimbursements (LaPointe, 2018). The initiatives further sought to promote inter-facility coordination hence achieving better patient outcomes.
The new systems that HHS unveiled can grouped under Direct Contracting (DC) and Primary Care First (PCF). The department developed PCF to cover primary care practitioners. First, the general PCF caters for the needs of care agencies that accept significant financial risks instead of high administrative costs (Advisory Board, 2019). However, the High Need Populations PCF creates an incentive for advanced interventions in the primary care sector. HHS designed DC as a general payment method for healthcare organizations. These developments by the HHS department prove that care facilities will have to adopt new ways of payment aligned to VBP.
VBP will also have a large-scale effect on the continuum of care. Firstly, hospitals can only achieve better patient outcomes through evidence-based practices. Thus, more facilities will strive to implement best care practices in their operations. Secondly, the effectiveness of VBP depends on the integration of information systems and predictive analytics into clinical practice (Marchisin, 2018). Healthcare organizations will hence procure advanced IT equipment for better management of patient information (Counte, Howard, Chang & Aaronson, 2018). VBP also puts more focus on the training and education of nursing and medical staff. Care facilities must support capacity-building programs since the success of the new payment strategy depends on the knowledge and experience of physicians. Moreover, a hospital requires effective managers to monitor and report on patient outcomes. VBP will thus promote coordinated and goal-oriented leadership in healthcare facilities.
Indeed, value-based payments have had numerous effects on patient outcomes. However, their continued success depends on different legislative and institutional changes. Thus, VBP will drive several changes. Firstly, they will lead to an increased focus on community demographics that affect patient outcomes. Secondly, healthcare facilities will have to adopt new payment methods that promote VBP. Thirdly, value-based care will change the structure and operation of hospitals and nursing agencies. For example, physicians will have more incentives to work as a team and develop interagency coordination. It will also be necessary for the successful implementation of evidence-based practices (EBPs). Lastly, there will be a reduction in the fee-for-service mechanism of healthcare payment. Insurers will reimburse practitioners according to the patient outcomes that they achieve. Several changes have offered a glimpse of what the future will look like for VBP. For instance, the HHS department has been successful in launching new payment mechanisms for Medicare. The passing of MIPPA and SRDA-QIP are also clear indications of the future of value-based payments.
References
Advisory Board. (2019). HHS Just Unveiled 5 New Value-Based Payment Models. Retrieved from https://www.advisory.com/daily-briefing/2019/04/23/primary-care-model
Burwell, S. M. (2015). Setting value-based payment goals—HHS efforts to improve US health care. N Engl J Med , 372 (10), 897-899.
Casto, A. B. (2018). Principles of healthcare reimbursement . American Health Information Management Association.
Counte, M. A., Howard, S. W., Chang, L., & Aaronson, W. (2018). Global Advances in Value-Based Payment and Their Implications for Global Health Management Education, Development, and Practice. Frontiers in Public Health , 6 .
DiChiara, J. (2015). What is the New Future of Value-Based Payment Programs? Retrieved from https://revcycleintelligence.com/news/what-is-the-new-future-of-value-based-payment-programs
Hodgin, S. (2018). Value-Based Purchasing: What Is It? Retrieved from http://www.insight-txcin.org/post/what-is-value-based-purchasing
LaPointe, J. (2018). Best Practices for Value-Based Purchasing Implementation. Retrieved from https://revcycleintelligence.com/features/best-practices-for-value-based-purchasing-implementation
Marchisin, J. (2018). Approaches to Improve Value Based Purchase Reporting. Retrieved from https://www.managedhealthcareexecutive.com/business-strategy/three-proactive-approaches-improve-value-based-purchase-reporting
