Value-Based Healthcare: Balancing the Challenges and the Benefits

Striking a balance between improved patient outcomes and reduced overall costs may seem like a paradoxical challenge. But with both healthcare providers and payers continually seeking to optimize spending, value-based healthcare (VBHC)1 aims to do just that.

Although not a new idea, the adoption of VBHC is not straightforward. So how can your hospital organization better understand value-based approaches to healthcare? And how can you and your patients benefit from the implementation of value-based approaches?

Let’s define VBHC

VBHC offers a method for improving patient outcomes and satisfaction while simultaneously helping to control and reduce costs. Essentially, payments to healthcare providers are based on patient outcomes. This differs to the more traditional fee-for-service (FFS) model, where the patient or insurance provider pays for every diagnostic test or medical procedure regardless of its success. ?

Through value-based approaches to healthcare, patients, healthcare practitioners, procurement, and payers all benefit, making it attractive to modern health systems. And as healthcare budgets are increasingly tightened in response to the COVID-19 pandemic, ageing populations, and the ability to treat more conditions, tackling spending continues to be a priority.

What are the challenges with VBHC?

Although introduced almost 15 years ago and seen by health systems as a priority, adopting VBHC is challenging due to its complexity and need for organization-wide procedural change. While VBHC is yet to be fully implemented in any country, healthcare systems around the globe continue to take steps toward the VBHC, patient-centric approach.

As the concept is based on the value of healthcare provision, health outcomes must be measurable. This is far from straightforward given the multifaceted nature of treatment pathways, the complexities of managing multiple diseases, and vagaries of different administrative systems. Additionally, all aspects of treatment need to be considered, since while a single intervention in isolation may be successful, the overall treatment outcome may not.

Understanding the benefits of VBHC

Despite challenges in its adoption, VBHC can benefit hospital organizations in many different ways. From increased efficiency and economical benefits to improvements in patient and staff experience in terms of safety and reputation, the advantages of implementing value-based approaches are far-reaching and translate across hospital organizations and through to patients.

How to move forward with VBHC

But what does VBHC mean to you and your organization? The term “value” can be interpreted in many ways depending on your role. Close collaboration and transparency are therefore critical to ensure the needs of providers and patients are fully aligned throughout the implementation process.

While system-wide change is a much longer and more complex process, putting VBHC into practice means starting to look at your healthcare organization from the patient and patient pathway perspective.?The key to success may well be to undertake small pilot studies with distinct patient groups. By starting small, it is possible to define specific outcome and cost measures for each patient group and then start to evaluate against these benchmark standards – and from here further expansion into additional groups takes you closer towards a value-driven fundamental system transformation.

With the European healthcare sector facing unprecedented challenges, VBHC forms part of a concerted effort to ensure healthcare systems can effectively adapt. With more holistic strategies in place, perhaps transformational change is possible?

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References

1.???Porter, Michael.?Redefining Health Care. Harvard Business Review Press?(2006)