Value-Based Care: What It Is, and Why Its Needed

The University of Texas at Austin’s Dell Medical School (DMS) offers an example of how education about value-based health care can be incorporated into undergraduate medical education. Throughout the 4 years of medical school, DMS students study the principles of value-based care delivery described above. During their clinical rotations, they also see these principles in practice in UT Health Austin’s affiliated clinics, which are organized around segments of patients with shared needs and designed to provide comprehensive solutions delivered by interdisciplinary, outcomes-focused teams. Recognizing that the essential purpose of health care is improving the health of patients, it is axiomatic that health care teams must measure the health results as well as the costs of delivering care for each patient. Leaders cannot align health care organizations with their purpose without measurement of health outcomes. In addition, the current dearth of accurate health outcomes and cost data impedes innovation.

definition of value-based quality

Through financial incentives and other methods, value-based care programs aim to hold providers more accountable for improving patient outcomes while also giving them greater flexibility to deliver the right care at the right time. In value-based care, organizations of doctors, hospitals and other health care providers commit to delivering a high standard of care. As part of their participation in Innovation Center models, health providers aim to reduce health care fragmentation and are evaluated on their quality of care and individual health outcomes. The Innovation Center provides them tools to support delivery of high-quality, coordinated, efficient care to help them succeed. The practice of holistic care is an effective way to prevent diseases and death as well as improve the quality of health care provided to patients [6].

Member programs

The definition of value is what it’s worth, in quantifiable terms, to solve a problem for the customer. How does the quality of the U.S. healthcare system compare to other countries? †Actual results may vary, depending on a variety of factors, including Innovation Health plan model. Data from baseline period, January 1, 2017 – December 31, 2017; current period, January 1, 2018 – December 31, 2018; claims period through December 31, 2018. Aetna is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies, including Aetna Life Insurance Company and its affiliates (Aetna).

Incorporating data related to the social determinants of health — the communal, physical and economic conditions of the environments where people live, work and age — provides a path to address many of the causes of health care disparities that lead to increased costs and poor outcomes. In addition to health outcomes, teams must measure the costs of their services for every patient. Cost-grouping methodologies like the one developed at the University of Utah15 or applications of time-driven activity-based costing16 can provide the data teams need value based meaning both to demonstrate the value of their care and to identify areas for improving their efficiency. In value-based care, health care providers recognize that each person is unique and can experience improved health outcomes through person-centered, coordinated care. In value-based care, doctors and other health care providers work together to manage a person’s overall health, while considering an individual’s personal health goals. For example, doctors might coordinate an individual’s blood work so that they only need to go into the clinic once.

Ways to improve

Health benefits and health insurance plans contain exclusions and limitations. “Innovative clinical management strategies coupled with value-based solutions allow us to achieve enhanced engagement rates, resulting in these impressive trend results,” says Sunil Budhrani, MD, MPH, MBA, CEO and Chief Medical Officer, Innovation Health. Out of eleven countries studied, Australia spends $4,543 per person each year and achieves the best outcomes. The United States spends $10,244 per person each year and achieves the worst outcomes. First-time pass rate is defined as the number of students passing USMLE Step 2 CK on their first attempt divided by the total number of students taking USMLE Step 2 CK for the first time. USMLE Step 2 CK is typically taken upon completion of third-year core clinical rotations.

“Savings don’t come from the denial of services; they come from ensuring that our members are receiving the right level of service at the right time and in the right setting,” says Germano. With his symptoms under control, the care team works with James to get him on the kidney transplant waiting list. Based on data from Definitive Healthcare and the California Department of Managed Health Care, we estimate that 90 percent of Southern California’s commercial and Medicare lives are in value-based contracts, as well as nearly 50 percent of its Medicaid lives, making this one of the more mature markets nationally. Using a combination of standing orders and workflow redesign, clinicians can be freed up to manage patients (“decisions”) while the rest of the team handles other duties (“tasks”).


It is important that individuals are active partners with their doctors and other health care providers in their care. That means people receiving value-based care collaborate with their providers to design their treatment plans and they let their providers know if they have any questions or concerns. This difference might be due to the socio-demographic differences among nurses or the differences in resources allocated for the health care systems in the two countries. Improving value and quality of care for patients at risk for neurological complications or for those undergoing neurological procedures is a worthy goal, yet most health care institutions struggle to do this effectively. Barriers and potential solutions to the implementation of value-based care and QI in surgical patients with neurological disease are summarized in Table 2 and discussed below.

  • In value-based arrangements, health care organizations are incentivized, or rewarded, for meeting various, interrelated goals.
  • In this way, providers treat an individual as a whole person, rather than focusing on a specific health issue or disease.
  • Value-based care puts greater emphasis on integrated care, meaning health care providers work together to address a person’s physical, mental, behavioral and social needs.
  • Open communication and sharing of information among care teams, carriers and patients enhances trust and engagement and empowers patients to take better care of themselves between visits, critical elements for the success of prevention strategies and care management programs.
  • Chan goes on to explain that in a value-based care model, providers are rewarded for things like successful surgical procedures, reduced effects and incidences of chronic disease, and measurably healthier lives.
  • In 2017, the AHA held a series of conversations with hospital and health system leaders to discuss the issue of health care affordability and the role hospitals and health systems play in addressing rising health care costs.

Successful providers will likely establish a strong presence with payers looking to delegate their growing memberships. Some have joined nationwide models funded by payers, large employers, or venture capitalists.19 Examples include Oak Street Health, Agilon, Aledade, One Medical, and Optum, among others. That list is not an endorsement of those organizations or that approach, but rather a starting point for finding the best fit for your practice should you choose to go that route. The goal of value-based care is to standardize healthcare processes through best practices, as in any business.

What’s the timeline for these programs?

When talking about value-based health care, it is often easier to start with what the ideal delivery of care would be and then work backward from there to determine how payments will facilitate and incentivize that delivery standard. Defining quality care, desired health outcomes, patient experience standards, and how your costs will be measured is vital for effective value-based purchasing. In recent years, health care payers and professionals have leveraged value-based payment models to address health care disparities that perpetuate in the fee-for-service system and that undermined some communities’ health long before COVID-19. These models aim to address disparities by improving quality of care and incentivizing providers to partner with community-based services and workers beyond traditional clinical care. Specifically, most programs in this continuum have demonstrated statistically significant effects on clinical outcomes and/or utilization (Table ). Taking a comprehensive approach to evaluations, we evaluate cost and utilization but also assess broader measures, eg, connections to primary care and the staff-patient experience.

definition of value-based quality

Growth in valued-based care has accelerated from creating approximately $500 billion in enterprise value today and may be on track to reach $1 trillion as the landscape matures.

Value-Based Care

To better understand the potential benefits of value-based care, stakeholders in the public and private sectors have tested a variety of approaches. The Centers for Medicare and Medicaid Services (CMS) has taken a leading role, testing several voluntary and mandatory programs with hospitals, physician groups, health plans, and other health care entities. One example is the voluntary Medicare Shared Savings Program, which allows providers to form groups called accountable care organizations (ACOs). ACOs can earn financial rewards by taking responsibility for caring for a defined group of Medicare beneficiaries and improving the care they receive, largely through better coordination of services. CMS also has tested whether an “episode-based” payment system — in which providers receive a single payment for all the services needed to care for a specific medical issue — can produce savings while maintaining quality of treatment. Value-based care ties the amount health care providers earn for their services to the results they deliver for their patients, such as the quality, equity, and cost of care.

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Successfully executing this approach requires timely and meaningful communication among all parties. In addition to improving data interoperability, programs should provide effective methods of communication with each other. For instance, a payer-based care management program could provide PCPs with multiple options for interaction (eg, telephone calls vs facsimile updates to care plans) to ensure ongoing alignment for each mutual patient. A unified, patient-centered definition of the value of care management is lacking.

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The research was approved by the Ethical Review Committee of Wolaita Sodo University College of Health Science and Medicine. The respondent who missed at least one domain of holistic care practice [19, 20]. The conclusion that a particular service or supply is medically necessary does not constitute a representation or warranty that this service or supply is covered (i.e., will be paid for by Aetna) for a particular member. Some plans exclude coverage for services or supplies that Aetna considers medically necessary. «We will not achieve value-based care until we put the patient at the center of our healthcare system,» Seema Verma, the administrator of the U.S.

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