What Is Value-Based Healthcare? A Primer

What Is Value-Based Healthcare? A Primer

In recent years, the concept of value-based healthcare has become a key part of the dialogue surrounding the American healthcare system.  But what exactly is value-based healthcare? The idea is relatively simple.  Rather than focusing on the quantity of care, reimbursement will be tied to the quality of care.  In other words, the standard fee-for-service model will slowly be replaced over time.  Under this fee-for-service model, all healthcare events, even if duplicated or unnecessary, are billable.

Furthermore, many such billable events occur late in the course of disease processes, carrying high cost but low value.  In place of this model will be various value-based models that emphasize efficient and high-quality care, particularly care that is evidence-based and of a preventative nature.  As is the norm, the Centers for Medicare & Medicaid Services (CMS) has guided policy in this arena, and the initial rollout of value-based care has been geared toward patients with Medicare and Medicaid.


This all sounds great, correct? In a way, the answer is absolutely yes.  Theoretically, the benefits of a value-based model are myriad.

Patients should receive higher quality care that is guided by the latest medical evidence.  Better health translates into less visits to a provider, less medication, and therefore less cost.

Providers will be reimbursed based on patient outcomes.  The focus of care will therefore naturally shift to prevention and limitation of hospitalization, both of which can mean higher patient and provider satisfaction.

Healthcare systems, which employ a large percentage of providers, will find their benefits to be aligned with those of the providers.

Payers can choose to bundle payments.  For example, a certain amount of money can be provided to care for a diabetic patient per year.  Such a strategy will emphasize efficiency and prevention over high-expense events like hospitalization.  Eventually, a healthier population means less expenditure.

Suppliers will need to align current and future products with value.  In other words, the products will need to clearly improve patient outcomes without being excessively priced.

Society as a whole will be healthier, and if costs truly are contained, health insurance premiums could stay stable or decrease.


We live in a remarkably complex society, and perhaps no industry captures that complexity better than healthcare.  Translating something from theory into day-to-day practice can be a seriously heavy lift.  Anyone who has worked in healthcare in any capacity can speak to the amazingly complex web that results from a seemingly simple healthcare transaction.  In a value-based model, this web is expected to satisfy the patient, the provider, the healthcare system, the payer, the suppliers, and ultimately, when replicated on a large scale, society as a whole.  Easier said than done.


In order to achieve the above goal, a team-oriented approach is clearly critical.  An initial roadblock to assembling such a team is the fact that many team members have been accustomed to being on opposing sides for many years.  For example, convincing providers that a healthcare system and a payer are on their side might involve some, well, convincing.

Once this roadblock is passed, another key barrier involves the coordination of all team members.  Often, electronic health records (EHRs) are not kept on the same system, making data sharing difficult.  Speaking of data, a large amount of data needs to be collected, analyzed, and then communicated in understandable and actionable formats.

Finally, during the transition from a fee-for-service to a value-based model, certain entities may see an initial drop in revenue.  Minimizing this drop by optimizing billing (and limiting costs) is critical to short-term viability and long-term buy-in.


Does all of the above seem impractical? It definitely doesn’t need to be. Thankfully, we live in an era of rapid technological advancement.  When used to your advantage, a seemingly daunting task can become relatively simple. Clair360™ was designed with this exact thought process in mind.  Our SAAS solution seamlessly integrates with all major EHRs and acts as the glue that connects payers, healthcare systems, and providers into one user-friendly ecosystem.  All the roadblocks listed above are addressed with this artificial intelligence based tool, allowing for a surprisingly smooth transition into the new world of healthcare reimbursement.  Our team of medical, technological, and business experts has built this software with one overarching goal in mind: value.

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