Value-Based Healthcare: Reshaping Medicine

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. Despite high healthcare 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 value-based healthcare is improving patient health outcomes. Research into organizations that have achieved improved patient health outcomes, often at lower costs, has revealed several strategies associated with success:

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



Team-based 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.

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 care enhance 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 emphasize preventive interventions over traditional fee-for-service contracts to prevent 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

To deliver preventive care to patients who would benefit most, practices need to identify high-risk patient segments—those patient groups whose health and SDOH, such as economic stability, education, language, and extenuating circumstances, consistently contribute to greater healthcare needs.

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.

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. For example, the Agency for Healthcare Research and Quality lists six domains of healthcare quality that can be assessed to evaluate the quality of care, whether it’s effective, efficient, timely, safe, patient-centered, and equitable. Similarly, The American Medical Association lists three elements of quality required for high-value care: quality in patient outcomes, safety, and service.

Whichever specific metrics you choose to track, your practice will require tools to track and evaluate the data for your analysis. Healthcare technology platforms can help you create targets for improvement under value-based contracts or programs. Technology equipped with analytics empowers your practice to take targeted actions such as identifying SDOH risks for existing patients, reducing inappropriate emergency department visits, and improving 30-day unplanned readmission rates.

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.