Better Health, Lower Costs: The Promise of Value-Based Care

At ValueHealth, our mission and our business are rooted in a very fortunate fact: It’s possible to spend less on health care and get better outcomes. In fact, with value-based care (VBC), the two go hand in hand and it’s exciting to see this care model becoming more prevalent in Ohio.

Value-based care begins with the essential premise of managed care: that basing payment on outcomes rather than the quantity of procedures performed will lead to healthier patients and lowered health-care spending. But value-based care goes much further, building on that base with tools and strategies designed to amplify the benefits.

A key element is the use of alternative payment models, in which reimbursement is based on the outcome experienced by the patient rather than a payment for the number of services delivered, as in the traditional, fee-for-service model.

At ValueHealth, we specialize in an alternative model known as bundled payments. Taking into account the average costs for facilities, surgery, anesthesia and the other elements of a procedure in a given market, we negotiate with providers in our networks to arrive at a single “bundled” price for a procedure. Our proprietary Muve® platform provides the necessary technology infrastructure for payors and providers to implement bundled payments.

What patients experience is a simple billing process and a significantly lower out-of-pocket cost compared to the bills they would receive in a traditional fee-for-service arrangement.

The patient receives a single bill — not separate invoices from the hospital, the surgeon, the anesthesiologist, etc. — and ValueHealth handles the downstream claim disbursements to the providers. But that’s only one part of a value-based care strategy.

What really makes it work is the value added by ValueHealth as a VBC convenor. Beyond providing a platform to handle digital paperwork, value-based care improves the health care process from start to finish. We partner only with providers of proven high quality and provide them with clinical pathways — evidence-based processes and quality-reporting capabilities that have been shown to yield optimal outcomes and reduce costs. We also provide the infrastructure and software needed for alternative payment models, customizing them for each set of providers.

ValueHealth focuses its model on ASCs, or ambulatory surgical centers, because they present so much opportunity for cost savings compared to an overnight stay at a hospital. The procedures best suited to a VBC model are in the popular and high-cost fields of joint replacement, cardiovascular care and bariatric treatment.

Quality and cost savings are designed into the process, starting with criteria to determine whether a patient meets the requirements to have their procedure performed at an ASC. As part of our Muve clinical programs, our nurse navigators start engaging with patients prior to surgery to establish a personalized care plan with comprehensive education and support. For orthopedic procedures, we get physical therapy started before surgery, ensuring a better outcome and experience.

The impact is dramatic: For example, in Texas, the average bundled payment for a total hip replacement at an ASC (including payment for all providers involved) is $25,000 to $30,000, compared to a $50,000 bill for the facility alone when the replacement is performed in a hospital.

A study conducted by researchers at Thomas Jefferson University in Philadelphia showed that patients who underwent total joint arthroplasty in specialty ASCs — with significantly lower costs and shorter length of stay — were no more likely to experience complications or readmission than those who had the procedure done in a hospital setting.

In ValueHealth’s model, higher quality and predictable costs are further guaranteed by adding a warranty to the episode of care in which providers bear a risk associated with poor outcomes. If, for example, a patient develops an infection after surgery and requires hospitalization, the provider responsible — not the patient and their insurer — bears the cost of the hospitalization.

Fortunately, though, in most cases the patient-facing elements of value-based care — evidence-based processes and extraordinary patient engagement — preclude bad outcomes. The engagement continues with tracking of the patient for a full year after surgery. Along with verifying the patient’s wellbeing, the tracking provides data that ASCs can use to improve efficiency and quality even more.

True value-based care is much more than an alternative payment system. It involves continually assessing performance to improve efficiency and quality and providing tools and processes to realize that improvement. It requires alignment and coordination among providers, payors and the VBC convenor, from the first patient contact through a year of recovery.

It holds tremendous promise for making high-quality health care more affordable to more Americans, and we’re excited to be bringing it to Ohio.