Where Will Value-Based Care Fit in Healthcare’s New Normal?
The coronavirus pandemic is assaulting the U.S. healthcare system on several fronts. As the virus continues to spread, it is harming tens of thousands of Americans and stretching healthcare resources. At the same time, it is negatively impacting the bottom lines of medical providers and putting value-based care models at risk.
Value-based care seems to have come to a screeching halt as healthcare organizations face the challenges of the COVID-19 pandemic. What lies on the other side of this healthcare crisis? What will define the “new normal”?
The rise of value-based care before COVID-19
When the march toward value-based care began over a decade ago, quality over quantity became the mantra. Value-based payment models incentivized the delivery of better patient outcomes and satisfaction while lowering costs.
Fueled by digital patient reporting mechanisms, providers and payers were adopting strategies and initiatives to drive value across the healthcare continuum at a steady pace. By 2018, healthcare payments tied to value-based care reached almost 36%, up 13% from 2015, representing about 226 million Americans. The drive to reduce unnecessary medical costs was working as payers reported a nearly 6% cost savings due to value-based care strategies.
A pause in the midst of the pandemic
The concept of value-based care appears to have taken a pause, especially as CMS has offered relief on some quality reporting requirements for value-based care programs.
Healthcare organizations are under immense financial pressure as non-essential provider visits and lucrative elective procedures are put on hold to divert resources to care for an influx of COVID-19 patients. Value-based payment arrangements typically require an upfront financial commitment – and providers are reticent to take on more financial risk in this uncertain economic environment.
In fact, a national survey of 226 accountable care organizations found that 90% believe the pandemic will have a significant or very significant effect on their ability to earn shared savings. And 56% reported that they are likely to drop out of their risk-based model to avoid financial losses.
Adapting to the new normal in a post-COVID world
The unique healthcare challenges brought on by the pandemic will highlight issues with the traditional fee-for-service models and likely create renewed momentum toward value-based care as the country recovers. In a recent interview, Dr. David Nash, Founding Dean Emeritus at Jefferson College of Population Health, shared that he feels confident “providers are going to embrace value-based payment more vigorously than ever before.”
There is little doubt that it will take some time for value-based care to get back on track. As the new normal evolves, three drivers for value-based care will take the front seat:
- Payer-provider collaboration – Payers and providers will join forces, becoming “payviders” to reduce risk, increase profitability and improve quality of care.
- Consumer experience – Digital patient access and engagement via online scheduling and telehealth will drive consumer expectations as a result of the virus redefining the healthcare journey.
- Care coordination – Coordinated care is a hallmark of value-based care. The patient populations hit hardest by the coronavirus – those with chronic underlying conditions – will benefit most from digital tools that improve care coordination.
There’s no question that COVID-19 has forever changed the delivery and business of healthcare. New initiatives, such as the adoption of digital technologies, to improve value will continue to shape the future. Find out how your organization can facilitate value-based care in our eBook, “A Digital Engagement Approach to Driving Value-Based Care.”