Thursday, February 14, 2019

Value-Based-Care vs. Fee-For-Service Policies

It is impossible to discuss the future of healthcare without hearing the phrase "value-based-care." While the traditional fee-for-service reimbursement model promotes quantity of services, federal officials have proposed several reimbursement programs that reward healthcare providers (presumptuously) to cover their costs and increase the quality of care at the same time, but costs continue to increase even with this attempted change.

As the healthcare industry transitions to this new way of delivering care, many healthcare providers continue to wonder how value-based-care is different, what programs will they support, and how successful it be long-term. Short-term, all it has developed was more stress for profitability.

What are the differences?
  • Fee-for-services model: healthcare providers were paid for the amount of services rendered. With this concept, providers ordered more tests and procedure as well as managed more patients in order to increase their billings. Costs were determined by what commercial payers would pay in the private market and a percentage of what Medicare would paid for similar services. Rates, typically were non-bundled, meaning each service was paid separately. Cost variations for procedures and tests rose based on what the local market could bare. Although testing and procedures increased, patient care and sanctification decreased do to costs. 
To drive down costs and improve patient outcomes, the Federal government designed value-based care; packaging it up with a pretty ribbon calling it Obama Care (Affordable Care Act). Their goal was straight forward and very ambitious, but soon reflected an underlined agenda (Socialized Medicine). 
  • Value-based-care: calculates based on numerous measures; some of which determined the need for a combined effort to share information (IT) through a centralized database, a different approach based on patient engagement to determine what processes where acceptable, a reduction of hospital readmission levels and or outpatient procedures verses lengthy hospital days for services, and cap-costs for service rendered. All this to ensure accountability of the provider to control costs and increase qualities given. Bundled payments rely on certain levels of risk. If the provider is able to decrease the cost of their services below the bundled payment price, then they can pocket the savings, but if costs are greater, there is a financial lost. Medicare has caps in place to protect those using its service. Costs continue to increase and with more using the service, providers are loosing ground financially. The first to go was the Rural Hospitals were volume was to key to remain operational.
Although both models have their good and bad points, the key is volume, costs, procedures, and available technology has been a problem for smaller facilities. Much like the "New Green Deal" suggested for 2020 Democrats, details are not well defined as to execution. The Medicare was originally designed to take care of our seniors, but to open the same capped conditions - Medicare for All - would only further place undo stress on care and not truly address true costs which continue to increase.

Most would agree, we have yet to fully leverage the value-based-care model. Going into the future, there are certain realities which must be addressed in order to see meaningful progress toward advancements in patient care while bending the proverbial cost curve of services rendered. What has been seen so far is to - reduce costs using unproven big promises to increase patient care sanctification levels, which remain in decline. Healthcare is very complex and certainly there are numerous areas that are jointly connected (threads that affect one another). You cannot look or even try to fix one area without disrupting another. WE NEED TO LOOK AT THE LARGER PICTURE. 

We are RemTecH Associates believes there is an item that continues to go unanswered. The area of Inventory Management Design to be not considered during design-development phasing. This oversight costs facilities 30-40% in annual revenue based on poorly conceived design policies and procedures. IT IS TIME FOR A CHANGE...