According to a 2020 report by the Centers for Medicare and Medicaid Services (CMS), the United States spent approximately $3.8 trillion on healthcare in 2019, representing 17.7% of the country’s gross domestic product (GDP). Although the U.S. Healthcare System has made a significant investment in healthcare, it is still criticized by many for its high cost, fragmented system, and inconsistent level of quality.
Value-based models of care are one area identified as having the potential to increase the efficiency of the U.S. health system. Value-based care incentivizes healthcare providers to provide high-quality, cost-effective care with a focus on patient outcomes. The traditional fee for service models are not incentivised to improve patient outcomes, but to increase the number of services.
In a study that was published in 2019 by the Journal of General Internal Medicine, the authors evaluated the impact of value-based delivery models on patient outcomes and quality of care. According to the study, value-based models are associated with better patient outcomes including reduced readmissions in hospitals and lower mortality. Value-based models are also associated with reduced costs as they encourage providers to reduce unnecessary procedures and tests.
One way to further enhance the value of healthcare is by increasing the adoption of alternative payments models (APMs). APMs are financial incentives that encourage providers to provide high-quality and cost-effective healthcare. Bundled Payment Models, for instance, encourage providers to coordinate care in multiple settings and reduce the number of costly readmissions.
APMs are already showing promising results. A 2020 report by the Health Care Payment Learning & Action Network (LAN) found that 59% of healthcare payments in the U.S. were tied to APMs, up from 34% in 2017. A 2020 report by the Health Care Payment Learning & Action Network (LAN) found that 59% of healthcare payments in the U.S. were tied to APMs, up from 34% in 2017.
Healthcare reform based on APMs and value-based healthcare would have a significant impact. The providers would have to change their practice to deliver high-quality and cost-effective healthcare. In addition, payers such as Medicare and insurance companies would have to change their payment methods to encourage value-based healthcare. A shift in care may occur that is more centered on the patient.
As a conclusion, alternative payment and value-based models show promise to improve the effectiveness of U.S. health care system. Incentives for value-based health care, as well as an increase in the use of APMs, could improve patient outcomes, reduce healthcare costs and create a sustainable healthcare system.
Reference: Markovitz, A. A., Hollingsworth, J. M., Ayanian, J. Z., Norton, E. C., Yan, P., & Ryan, A. M. (2019). The association between the hospital readmissions program and mortality after and during hospitalization due to acute myocardial ischemia, heart failure and pneumonia. Journal of General Internal Medicine 34(9): 1698-1706.