Value-based health: A new healthcare paradigm
The concept of value-based care—a movement away from a fee-for-service healthcare model to one based on more effective patient care—has been around for decades. Value-based care, in fact, was codified in 2010 by the passage of the United States Patient Protection and Affordable Care Act (PPACA). The law mandated extensive reforms about the quality of care and the manner in which it was to be delivered to millions of Medicare and Medicaid patients. As a result, a number of programs were established to facilitate value-based care, including the formation of Accountable Care Organizations (ACOs).
ACOs consist of a group of health care providers who come together to provide coordinated high-quality care to populations of patients. The goal is to provide patients and populations—especially the chronically ill— with the right care at the right time. The Affordable Care Act also started a fundamental change in the conversations about provider reimbursement—with a primary focus on paying for better health outcomes and lowering costs—while also expanding access to healthcare.
Better outcomes, reduced costs
Today, however, both providers and payers have realized that the basic cornerstones of value-based care—better outcomes and reduced costs within their traditional roles—are insufficient to create a truly holistic healthcare ecosystem that extends beyond the clinical environment and into the daily lives of patients/consumers. Consequently, a new healthcare paradigm—“value-based health”—has emerged to provide care and maintain wellness in almost every aspect of a patient’s life.
Numerous value-based programs, pioneered by providers, payers, life sciences organizations, and others in the healthcare ecosystem, have a shared mission of delivering care with better quality, a better patient experience, and a significant reduction in unnecessary costs. Various studies consistently show that “healthcare” has a smaller impact on an individual’s health than social factors, including health behaviors, socioeconomic elements, and physical environment.
Moreover, technological progress in the last decade, such as predictive analytics, digital health, and automation, has profoundly reinvented how health (and its value) is measured, managed, and delivered. According to the International Data Corporation (IDC) healthcare organizations are on a mission to digitally transform to create a value-based healthcare system. “The digital transformation journey begins with a common definition of the mission, strategic priorities, and programs so that individual projects or use cases support the healthcare organization’s overall goals and objectives,” stated an IDC executive.
To better understand how organizations have undertaken this digital transformation in a relentless search for value, as well as provide a roadmap for others to follow, the IBM Institute for Business Value (IBV) and IBM Watson Health conducted extensive research to determine what is needed to transition traditional value-based care into the more inclusive value-based health—a system that integrates technology to accelerate progress and helps move healthcare beyond hospitals, doctors offices, and other clinical environments.
Today, as healthcare systems around the world consider how to maintain access, quality, and efficiency in the face of ever-increasing demand—along with a diminishing physician workforce— providers and payers are more intently focused on understanding how to optimize their operations to deliver value. They have discovered that value measurement must be centered not only on individual patients, but groups or populations of patients as well.