In recent years, doctors and scientists have created body parts using 3D printers, reprogrammed human immune cells to fight cancer and discovered the first new class of antibiotics in more than a generation.
A lot has changed in medicine. Yet, the way we pay for health care in the U.S. is largely the same as it was 50 years ago.
But fortunately, that’s rapidly changing with the growth and increased adoption of value-based care.
These days, employers that provide health insurance are interested in paying to make their employees healthier, which may not necessarily require multiple expensive procedures or dozens of tests. For their part, employees, as well as consumers who get their health insurance through Medicare, Medicaid or a health insurance exchange, want quality care that’s also affordable — as well as a better experience when they visit the doctor.
Enter value-based care: An approach designed to pay health care providers not for the volume of tests or procedures performed, but for making sick people healthier and keeping healthy people well.
One example of the value-based approach is the bundled-payments model, which pays a health care provider a lump sum for providing an overall course of treatment. Health insurers use bundled payments to pay some hospitals for knee, hip and spine procedures. For example, instead of paying separately for all of the care a patient receives when undergoing a knee replacement, a hospital receives a single sum for completing the surgery as well as managing the patient’s recovery. By paying for the full course of care, it encourages providers to work together towards the shared goal of the best possible outcome for the patient. That collaboration often leads to better care for the patient at a lower cost.
With value-based care, patient outcomes may be better, with fewer patients readmitted to the hospital for complications following their surgeries, but costs may also be significantly reduced. According to UnitedHealthcare, participating employers have saved an average of more than $18,000 per surgery, and employees undergoing joint replacement may save up to $3,000 in out-of-pocket costs when they use an in-network facility that takes bundled payments.
The value-based care model is not only beneficial to people who need major services, such as joint replacements. It also provides physicians and hospitals with financial incentives designed to help ensure healthy people stay that way.
Some studies have shown the value-based model increases the odds that people will receive screenings for breast and colon cancer and that pregnant women will receive prenatal care. Such care helps keep people healthier and helps catch health concerns earlier, when they’re usually easier to treat. This in turn leads to savings on the costs associated with major health problems that could arise without screenings or preventive doctor visits.
The potential advantages of a value-based care model, especially for employers trying to manage health care costs and employees who want high-quality and affordable treatment, suggest the popularity of the model will continue to grow.
And while it may not sound as innovative as 3D-printed body parts or reprogrammed immune cells, its potential to improve the health care experience and make care more affordable for millions of Americans make value-based care just as groundbreaking.