Health care is at the center of a political storm that seems to change with every passing day. Such uncertainty makes it difficult, if not impossible, for trustees to plan for the future of their funds. Regardless of the changes occurring in Washington, one change that's taking hold is value-based care.
According to McKesson, this care model encourages health care providers to deliver high-quality care at low, effective costs. Additionally, organizations under this model have the opportunity to mix health care models with business models, as this type of care significantly impacts financial performance.
What Is Value-Based Care?
This type of care is providing patients with improved quality of health care and outcomes. Medical providers focus on proactive care instead of responding reactively to a patient's symptoms. Wellness is the goal rather than treating a patient's illness. From a financial point of view, this type of care is rewarded for these outcomes, as opposed to the traditional pay-for-service model, according to The Huffington Post.
Reducing health care costs is beneficial for not only the member but the trustee too. For example, if a member suffers from a chronic condition such as migraines, instead of visiting with several doctors attempting to get sufficient care, the member would work with one integrated team of medical providers that knows the member and that member's health history. The team of doctors would integrate a proactive approach to managing the migraines — such as establishing an exercise program, reducing stress and managing any medicine associated with the headaches or related symptoms. Thus, a wellness and prevention approach is stressed rather than a reactive approach to the migraines. Such prevention reduces the need for tests, hospitalizations and excessive medications.
How Does Value-Based Care Reduce Plan Costs?
According to the Cleveland Clinic, under value-based care, doctors and hospitals are paid on the patient's outcomes, not on the numbers of procedures or patients seen. Payments are bundled, instead of itemized for every service performed. Patients are cared for by an integrated team of doctors and nurses who communicate more efficiently, instead of through individual medical professionals, who may have to review and re-review medical records they've never seen before. This approach of proactive, integrated care ideally will result in fewer hospitalizations, fewer prescriptions and less red tape, thus saving the plan money.
Although value-based care will continue to move forward, only 3 percent of health systems provide greater than one-half of all of the total health care under value-based contracts, according to a report from Deloitte. Payment for volume is still the standard. Trustees should take this into consideration when negotiating their health plan contracts. The health of their members and the fiscal health of their organizations should be paramount, as we move into this next phase of employer-provided health care. The tides are changing, and the way that health care is provided should change, as well.
Jennifer Kiesewetter, founding and managing member of Kiesewetter Law Firm in Memphis, Tennessee, is a seasoned attorney in the field of employee benefits. Ms. Kiesewetter's practice includes regulatory compliance and governance with the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code, and the Affordable Care Act (ACA), in addition to the other federal laws governing employee benefits and health care compliance regulatory law. She is also an Adjunct Professor of Employee Benefits at University of Memphis Cecil C. Humphreys School of Law. Additionally, Ms. Kiesewetter is a frequent writer and speaker on the topic of employee benefits and health care compliance regulatory law, locally, regionally and nationally.