The Centers for various services are phasing out fee-for-service care and replacing it with a value-based model with the vision of improving the quality of care for patients. This transition is promoting changes that will ensure better care at a lower cost. But exactly how will this affect the revenue cycle?
- Fee-for-service arrangements, reward the volume of services, and treating illnesses and injuries as they occur.
- Value-based care rewards the value of services, and proactive management of health: preventing illnesses and injuries or catching them at an earlier stage when they are less expensive to treat.
Effects of Fee-for-service to Value-based care on the Revenue Cycle
The Centers for various services are phasing out fee-for-service care and replacing it with a value-based model with the vision of improving the quality of care for patients. This transition is promoting changes that will ensure better care at a lower cost. But exactly how will this affect the revenue cycle?
- Fee-for-service arrangements, reward the volume of services, and treating illnesses and injuries as they occur.
- Value-based care rewards the value of services, and proactive management of health: preventing illnesses and injuries or catching them at an earlier stage when they are less expensive to treat.
Value-Based Care vs. Fee-for-Service
- Fee for service is a payment model that adds up incentives for physicians for more services as payment depends upon a number of services. So medical practices may overlook the quality of care for higher profits.
- As long as insurance companies are bearing the billing weight patients are more willing to accept more treatments.
- Unlike value-based care, payment is determined by the number of services not the quality of services.
- Value-based care models include payment for the quality of the services and improving the health of those who have chronic conditions in an evidence-based, cost-effective way.
- Quality of patients’ care is emphasized with tracking health condition.
How value – based care differs…?
- Value-based care manages and improvises data of health care reform that not only improves quality and efficiency but saves costs as well.
- Value-based refers to the quality of the care that patients are receiving, rather than the quantity. It takes into account access, price, efficiency, and alignment of incentives.
- The ultimate goal of the service is to maximize value for patients and define health outcomes achieved per unit of cost spent.
Value-based care reimbursement
- It becomes essential for healthcare providers and hospital revenue cycle managers to completely change their ways of assessing the financial health of their system.
- Â They may need to adopt a new viewpoint to see the revenue cycle from the value-based care approach instead of the fee-for-service payment system.
- With value-based care reimbursement the revenue cycle of organization may change from a transactional type of payment system to taking on more revenue cycle analytics.
Why quality and efficiency needed?
- Incentives are provided to healthcare providers for good quality and efficiency benchmark measures. Physician reimbursements are dependent upon achieving these performance measures.
- A primary care physician leads and coordinates care between multiple providers and specialists to manage a unified care plan for patients and to ensure efficiency and quality of service. \
The ultimate key to success in this transition and beyond
With decreasing revenue, we have to improve margins as much as possible. To do so, care providers need to focus on three key things:
- Focus on Shared Savings Programs to Maximize Reimbursement
Hospitals must manage shared savings contracts with the expertise to qualify for every possible bonus. Effective management of these contracts not only gets shared savings payments but also improves quality and lowers costs.
- Improve Operating Costs to Deliver Care More Efficiently
Investment in streamlining operations and eliminating waste from the system goes directly back to the hospital, not the payer
Work to lessen every category of waste like that from service that isn’t standardized, unnecessary orders and patient injury is absolutely essential for setting more margins.
- Increase Patient Volume
Patient volume automatically increases with above adaptations. Patients will ultimately include top performing ones in their networks.
Thus, value-based care practices can actually make more money with better services for patients with a reduction in costs. But for all these benefits, switching over to value-based care is worth investigating!
