From Volume to Value: The Shift to Value-based Care   

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“Parents who’ve saved $20,000 for their child’s college fund find themselves in the ER. The bill for something performed there could easily cost double what they’ve saved,” says Rourke Yeakley MD, MHA, co-founder of both Health Tech Idaho and the newly opened Empyrean Clinics in Caldwell and Meridian. “It can completely wipe people out, and it doesn’t have to be this way.” 

The shift to value-based care will change this, and that shift is coming. 

What is value-based care? 

Our traditional system of health care relies on a volume of services to generate large amounts of profits but at a high cost to the consumer. When patients have a service provided, they pay a fee – often an exorbitant fee. This is called fee-for-service care. Health care providers and payers have leveraged this model for significant profits but with menial outcomes for population health. This model is stuck in a reactive mode rather than offering preventative care for patients. 

“The current system has little ties to quality of service or patient outcomes,” says Jenni Gudapati PhD, MBA, RN, director for Boise State University’s Value-Based Healthcare Program and recent founder of Amethyst Solutions consulting services. “So, the US currently ranks 34th among industrialized countries for patient outcomes with over double spending per capita on healthcare expenses.” 

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Jenni Gudapati, PhD, MBA, RN
BSU Value-Based Healthcare Program – Director
Amethyst Solutions – Founder and CEO

“Additionally, healthcare is the number one reason for bankruptcy in America, with the majority of those filing having insurance but still unable to pay co-pays and out-of-pocket expenses.” 

In contrast, value-based care is a way for doctors and hospitals to get paid based on keeping people and communities healthy, not just for doing lots of tests and procedures. Instead of making more money by ordering many services, providers earn bonuses for helping patients avoid getting sick or hospitalized. The goal is to give good quality care while spending health care dollars wisely. 

Value-based care relies on providers being responsible to keep a population of people healthy. If a provider is able to keep their population healthy, they are rewarded. If not, then they are held responsible. 

“The ‘value’ in value-based care refers to what an individual values most,” says the Centers for Medicare & Medicaid Services. “In value-based care, doctors and other health care providers work together to manage a person’s overall health, while considering an individual’s personal health goals.”  

What are the chances we’ll transition to value-based care? 

“It’s not a matter of if, but when,” says Dr. Gudapati. “A key factor to this is the looming solvency of the Medicare Hospital Trust Fund. This has spearheaded the HCPLAN (Health Care Payment & Learning Action Network) setting aggressive national goals tied to quality and value.” 

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Rourke Yeakley, MD, MHA
Empyrean Clinic co-founder and CEO

She continues, “Upcoming requirement changes to Medicare will force healthcare to shift to value-based care, but most systems and providers are not prepared for it.” 

A transition to value-based care is extremely difficult to navigate. It requires substantial changes in how the health care system works, how money flows, and how everyone thinks about their roles – which makes it a tricky transition even though it aims for better and more affordable care overall. Not only will providers have to focus on preventing people from getting sick rather than just treating them after they are already sick, but also to be incredibly careful about costs and not waste money on unnecessary tests or treatments. 

If the transition to value-based care is for sure coming, then why hasn’t it begun already? 

“Transitioning from the current fee for service system to a comprehensive patient centered system, commonly referred to as value-based care, has been a challenge, even though it has to happen.”  says Dr. Yeakley.  

Who can help with the transition to value-based care? 

Innovators are going to be essential to ease the burden of risk from current systems while helping with the coordination and delivery of care to patients.  

“Every touchpoint in a patient’s health journey is an opportunity for an innovator or entrepreneur.”
– Dr. Rourke Yeakley

“This is one of the reasons we created Empyrean Clinics: We fill the gaps that the systems cannot maintain,” he says. “We have also created a healthy workplace environment for healthcare providers. This results in improved care delivery. Our goal is to offer value on all levels. Everyone wins.” 

It’s a big challenge to track whether people stay healthy or get sick – much harder than just counting up all the services provided. There needs to be new systems to measure things like how many people were able to avoid going to the hospital. Doctors and hospitals also must work closer together as a team to keep people well, which can be tough to coordinate.  

“Every touchpoint in a patient’s health journey is an opportunity for an innovator or entrepreneur,” says Dr. Yeakley. “Solutions for coordinating care throughout the care continuum are going to be essential.” 

Innovators and startups have an incredible opportunity to offer critical assistance across the spectrum of needs.  

Dr. Gudapati suggests three questions for entrepreneurs to consider when evaluating opportunities focused on the value-based care model: 

  1. How does your organization contribute to the overall value of patient services that are provided? 
  1. What can your organization do to minimize patient/payer/provider risk? 
  1. How does your product/service contribute to the overall cost containment and efficiencies of care? 

The transition to value-based care is going to take everyone working together. While innovators and startups can step-up, there are ways for everyone in the community to help, says Dr. Gudapati. 

“Talk with employers and state officials about demanding Value-Based Contracting and payment models. As soon as the public understands and promotes better care models, cost containment, and top-quality results, the quicker we will move to get there.” 

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