How Value-Based Healthcare Benefits Patients, Providers, and Payers

The benefits of value-based care are numerous, but are not always fully understood by many patients, providers or payers. Value-based care is an alternative to the fee-based reimbursement method more widely used now. Used properly, it can help improve patient outcomes while offering key benefits to payers and providers. In short, this healthcare model provides an opportunity to flip the current model that is burning out much of the industry and leaving patients at risk.

Why Is Value-Based Care Important?

Value-based care aims to create significant changes in how providers are paid. Numerous potential benefits exist, but at the heart of this is the change in focus. Instead of focusing on the number of services provided, a value-based care model focuses on the quality of services. The end goal is to ensure patients receive better care but also to help provide improved population care and reduce overall healthcare costs.

Value-Based Healthcare vs. Fee for Service

To better understand value-based care, consider how providers are currently paid. In a fee-for-service model, the provider receives payment based on services provided retrospectively based on an annual fee schedule or bill charges. In a value-based model, payment is tied directly to the quality of care provided. It rewards providers who deliver in the effectiveness of care and efficiency of service. Value-based care, then, is the better option for patients and for both payers and providers as well.

How does this transition happen?

Organizations have to work through several steps to ensure a smooth transition to a value-based healthcare system to achieve these value-based benefits. The steps may include:

  1. Using data and analytics: Identifying patient populations through the use of analytics to uncover patterns that may enable providers to offer value-based care, such as providing insight into the number of patients in the area and the type of care they need.
  2. Organizational partnerships: Creating partnerships with necessary organizations based on patient populations. That may include local organizations that offer free rides to patients who cannot come in for care or provide support for those in need.
  3. Improving staffing. Organizations also need to work to improve staff, so they are able to meet the higher standard of care for patients. This often requires a significant investment in staffing levels as well as software to support efficiency.
  4. Creating care models. A care model needs to be evidence-based and easy to follow by the team to improve the quality of care provided to patients.
  5. Defining success. Create a way to measure this change and how you will measure it.

What Value-Based Care Means for Providers

For providers to make the decision to move to a value-based system, they need to see the benefit to them specifically. There are significant improvements to the provider. At the heart of this is improved care coordination.

In the current fee-for-service-based method, providers are compensated by the volume of patient care provided. That includes the number of tests they order, the number of appointments they have, and the prescriptions they write. One study reported by JAMA found that 20 to 25 percent of healthcare spending – including some of those tests and appointments – are wasteful and unnecessary. This included low-value health care, use of brand-name medications, and inflated administrative costs.

By moving to a value-based healthcare system, everyday health becomes the focus. This can lead to fewer stays in hospitals and the ability to provide higher quality care. Doctors and their staff can provide better patient care. At the same time, they continue to build trust with their patients.

What does this mean to providers?

It’s estimated that up to half of all providers have experienced some level of burnout, which is directly related to the fee-for-service care model. Consider, for example, that the average U.S. physician has a patient panel of 2,300 people, doctors must meet with patients every 15 minutes, which leaves very little time for providing quality care.

Improved Care Coordination

In a value-based system, that panel size can drop, sometimes significantly, creating an opportunity for doctors to spend more time with patients – but this can also reduce the burnout rate of doctors. When doctors can spend more time with patients, patient-doctor trust can increase.

With more time to spend with patients because the load requirements are fewer, doctors build better relationships with those patients, which can lead to improved trust. That may mean better conversations, more honesty in communication about health, and in the long term, the potential for better health outcomes.

For providers who want to help improve the health of their patients, a value based healthcare system enables that. It allows physicians to spend less time on administrative tasks, more face-to-face time with patients, and better understanding of health needs and goals. That often means providing the best quality of care possible.

How Value-Based Care Benefits Patients

The impact of value based healthcare is no more obvious than with the impact on patients themselves. This method increases patient satisfaction. Many people don’t like going to the doctor. When the experience is riddled with paperwork, being ushered from one place to the next, and having very little time talking to a doctor, it’s difficult for a patient to feel positive about the experience.

Less Spend for Better Outcomes

What does value-based healthcare mean for the patient then? In short, they can spend less for better outcomes.

There are three key areas to focus on, according to a report published by Academic Medicine.

  • Compatibility: This is the benefit that comes from providing patients with the ability to finally participate in their lives in a way that allows them to be themselves more fully.
  • Comfort: Patients who are able to utilize a value-based system typically feel relief from physical and emotional suffering. That’s the value they experience from having more time with doctors and a better level of care.
  • Calm: Calm refers to a patient’s ability to live their life normally without too many obstacles from healthcare, even when they are receiving care from a provider.

Ultimately, providers’ better quality of care leads to better health outcomes for many patients. It’s not just improvements in one area, either. Rather, their full spectrum of comorbidities and the side effects they experience from treatment may improve.

In a value-based model, the goal of the healthcare system is to solve the problems and meet the needs of the patient. It is less focused on treating the current illness or treating symptoms. For example, instead of focusing solely on helping a patient to reduce pain through medications, this type of care goes deeper to look for the cause of the pain and focuses on treating that. Solving the patient’s needs may mean identifying and working through non-clinical opportunities, such as improving diet, physical activity, and mental health. Providers have better access to services integrated into their practice to enable this.

How Payers Benefit from Value-Based Care

Payers can benefit directly from value based healthcare systems as well.

Decreased Administrative Burden

The direct benefit to payers is that there is a decreased administrative burden present. In a fee-for-service-based structure, every transaction – whether an appointment, prescription, or test – needs documentation, approval, and hands-on insight. That leads to a significant amount of paperwork. Removing those obstacles gives a direct opportunity to save money in operations.

There are other ways payers benefit, too. For example, a value-based system provides better controls of overpaying for patient services. How does that happen? In short, the patient receives better care, and that leads to better health outcomes for patients. That means less money is spent on urgent care needs or on ongoing care costs. Payers end up paying out less money because of this reduction in long-term services.

Reduced Client Risk

Yet another benefit is the reduced client risk. There is a strong focus on preventative healthcare in a value-based healthcare system. It’s not just about treating an illness at that moment. This can allow for fewer chronic conditions to develop. It also may lead to a healthier overall outcome for patients and improvements in overall patient populations. People need fewer services, and that can lead to lower costs.

How to Take the Next Step

Transitioning to a value-based healthcare system can be beneficial for patients, providers, and payers.
Yet, to facilitate that process, there needs to be tools and resources to support it, which was significantly lacking in many doctor’s offices until recently. Tools such as telehealth and remote patient monitoring are changing the way providers can reach their patients and helping to improve their ability to provide a higher level of care to their patients.

The right solutions work to improve access to care no matter where a person is located. They also work to reduce wait times, incorporate more automated processes, and offer options like apps and patient portals for scheduling to improve efficiency. They can enable better care coordination and patient monitoring.

Connected health solutions, like those offered by Trapollo, enable organizations to better achieve their goals as they move to improve care. Contact us today to learn more about how this service can help your organization.


Meredith leads strategy and execution of Trapollo's comprehensive marketing strategy including events, digital, content, campaigns and social media. She has a passion for bringing awareness to innovative, digital healthcare solutions through marketing programs enabling organizations to fully engage patients and improve patient experiences.