Value Based Care - A Model For The Medical Tourism Industry
By Diseiye Iyebote, MD
Medical providers in the United States have traditionally operated on a fee-for-service model. Under this model, insurers reimburse healthcare organizations for services rendered regardless of the outcome. But a new approach, value-based care, is gaining steam.
Value-based care links reimbursements to patient outcomes, incentivizing providers to prioritize the patient’s short and long-term health goals, as opposed to performative management style which emphasizes procedures.
The goal of value-based care is twofold: eliminate unnecessary spending and improve patient outcomes.
Phasing Out an Old Business Model
Fee-for-service has long been the model for healthcare operations in the United States. The problem with fee-for-service is that it rewards procedures rather than outcomes. Hospitals and other providers charge based on the number of beds filled, tests ordered, and treatments performed. The more a provider does, the greater their profit.
It’s easy to see how this model may incentivize hospitals to order high tech, extensive, and invasive testing or treatments that are unnecessary or do not lead to better outcomes.
But in healthcare, preventative, less invasive, or lower cost procedures are sometimes the best solutions for addressing and managing a patient’s problem list. And in general, if a patient is healthy then fewer tests, treatments, or overnight stays are necessary. To incentivize healthcare providers to maintain efficient operations and high quality care, a shift in billing practices may be needed. This is a core principle of value-based care.
Benefits of Value-Based Care
With value-based care, reimbursements are tied to patient outcomes and the quality of care, thereby rewarding providers based on effectiveness and efficiency. Providers are incentivized to focus on preventative care and education in order to minimize post-treatment complications and rates of hospital re-admittance, and improve managed care for those with chronic conditions.
Affordability is Incentivized
Value-based care rewards providers for doing more while spending less. Although start-up costs for installing systems such as digital health programs may be high, by offering patients low-cost access to care, these care models are cost-effective in the long run. Additionally, patients are more likely to seek care when needed as a result of its affordability.
Communication Improves
Sharing information between providers and facilities creates better outcomes for patients. In a reimbursement model, healthcare providers are pitted against one another as competitors. But value-based care incentivizes teamwork amongst all involved providers caring for a patient. Patients benefit from stronger, more connected health networks.
Administrative Waste is Minimized
Improved communication and shared information not only benefits the patient but reduces administrative waste. Bundling payments across departments or even providers requires less administrative detail and allows for more equitable sharing of resources.
Quality of Care Increases
Because patient satisfaction is the gauge by which successful delivery of care is measured, providers are encouraged to do all they can to receive positive reviews. Clinical care research suggests that doctors and nurses who work in environments where patients are prioritized over procedures are less likely to become burned out. Employee retention benefits everyone.
How Does It Work?
Value-based care has clear goals: control costs and improve outcomes. But the details of how it’s implemented vary. Thus far, value-based care is primarily associated with Medicaid and Medicare. These two government programs have been able to create models for value-based care where private providers have lagged behind.
The Centers for Medicare & Medicaid Services (CMS) has implemented the following three programs centered on value-based care.
Accountable Care Organizations (ACO)
Accountable Care Organizations (ACOs) are networks of physicians, hospitals, and other medicare providers who together, share savings if they are successful in reducing the cost of care and improving patient outcomes.
Bundled Payments
Bundled, or episode-based payments, reimburse providers collectively, with a single payment for the treatment of a specific condition. If the providers (for example anaesthesiologist, surgeon and hospital) work together to reduce cost, they will each benefit from an increased profit.
Patient-Centered Medical Homes
A patient-centered medical home (PCMH) provides patients with one central location from which they receive care. Generally managed by the patient's primary care physician, a PCMH strives to keep chronically ill patients out of the hospital and under managed care.
The Future of Value-Based Care
Value-based care has not yet been implemented as widely yet, but is expected to grow nationwide in the coming years, especially as federal and patient demand for lower-cost healthcare increases.
CMS projects that all Medicare payments will flow through value-based care programs by 2030. In 2020 alone, ACOs saved Medicare over $4 billion. These savings, combined with the improved data sharing and increased efficiency of value-based care models, should entice even more insurers to make the shift to value-based care payments in the near future.
Is value-based care a practical model in the medical tourism industry? Can the medical tourism industry adopt an insurer reimbursement approach based on patient outcomes? What would be the incentive for providers? Would this burden the medical travel process or are we likely to see similar positive patient outcomes?
American Medical Care (AMC) is a network of physicians and facilities providing full service concierge care in partnership with insurance providers. AMC is leading the way as it adopts a value-based care system through relationship building and agreements with providers within the same healthcare network.
AMC has successfully utilized online integrative patient-provider-insurer tools and technology solutions to activate a value-based care system. This system treats the participants as a community, providing holistic and supportive care to all participants while enabling a transparent communication platform. The emphasis is placed on prioritizing the patient's needs at each step of the medical travel facilitation process: from gathering pertinent patient data to connecting the provider and patient prior to travel, communication with insurance and hospital providers, trip planning, hospitality support, and integrative payment solutions.
The results of implementing this method of care is a shared experience that is valued and appreciated by the patient, provider, and insurer, while facilitating quality, concierge-level support for domestic and international medical tourists.
Adopting a value-based care system simply allows for more open communication amongst a network of providers, resulting in positive patient outcomes as well as overall satisfaction for the provider and insurer.
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