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The Benefits Of Value-Based Healthcare

Value-based healthcare is a payment model which reimburses hospitals and physicians based on patient outcomes. Providers are rewarded for helping patients manage chronic illnesses, improve their overall health, and live healthy lives. 

Why a New Model? 

Healthcare costs continue to rise. The U.S. government has recognized this financial burden for American families. The value-based healthcare reimbursement model is one of the solutions the government has implemented to control healthcare debt. 

How Value-Based Healthcare Helps Patients 

Patients are benefitting from value-based healthcare because they know up front what they will be paying. This system has decreased surprise medical bills that patients were once used to receiving. The fee-for-service system is now one of fee-for-value, which should make many patients happy. Lower financial burdens for healthcare might mean that patients are able to live longer, healthier lives. 

This new reimbursement model focuses on preventative care, decreasing admission rates to the hospital, and managing chronic diseases. A few of the benefits patients receive include: 

  • Developing a better relationship with their physician 
  • Spending less money on hospital admissions  
  • Understanding their health condition and self-care behaviors 

How Value-Based Healthcare Helps Providers 

Value-based healthcare is a complicated process, mainly because it’s new. Many providers have found the system to be a challenging new way of thinking and charging for care. The electronic medical record (EMR) is at the core of the entire process, which many providers are still learning to use. However, if healthcare providers adopt this policy they can benefit by: 

  1. Gaining patient satisfaction 
  2. Developing a collaborative relationship with their patients 
  3. Obtaining closer management of patients and the healthcare team 
  4. Collecting government allocated healthcare dollars 

How Does Value-Based Healthcare Work? 

Value-based healthcare providers collaborate with different healthcare teams. This includes care-coordination teams and healthcare specialists to deliver more in-depth knowledge and resources to patients. 

Medical Home Team Approach 

One money-saving primary care philosophy introduced, because of the value-based system, is the medical home team approach.  This approach places the patient at the center of their primary care team. Maryland pcmh saved $98 million and increased their patient satisfaction scores by 10% in one year through the adoption of this approach. 

The medical home team model approach relies on the electronic medical record from all providers in the patient’s coordinated team. To better understand how this system should work, let’s consider Jane Smith’s healthcare journey as a newly diagnosed diabetic: 

Jane makes an appointment with her primary care provider for an annual checkup. During the visit, her doctor draws blood and notes that Jane is diabetic. This information is shared through the EMR to the dietitian and endocrinologist whom she is referred to by her primary physician. Her provider’s office then utilizes the EMR to book her appointments with these specialists to increase compliance.  

Jane meets with her endocrinologist who teaches her how to use insulin. The specialist records notes in the EMR describing the education provided and Jane’s responses.  

Before Jane meets with the dietitian, these notes are reviewed in the EMR to better understand where Jane is in the process. This allows the dietitian to instruct on a new diet that covers all of Jane’s health needs, such as her diabetes, high blood pressure, and other cardiac issues. Jane learns everything about what to eat, why she has diabetes, and how to lower the risk of other chronic diseases. The dietitian also reads a note from the endocrinologist, who suggests consulting home health for a one time visit with Jane to discuss insulin administration and when to test blood sugars in the home.  

Six months later, Jane arrives at her primary care doctor’s office and verbalizes understanding of her disease and self-care management program. She reports that the home care nurse visited for a few weeks to ensure Jane had a good understanding of her diet and medication regimens. She has not developed other chronic conditions and hasn’t needed any admissions to the hospital due to diabetic complications.  


In this new system, hospitals are reimbursed based on the outcome of the patient. If a patient doesn’t comply with the prescribed care – the hospital isn’t compensated. It’s a strict model to follow during times of patient noncompliance. But, this principle relies heavily on the understanding that the noncompliance is often the fault of the healthcare organization, due to poor education and support for the patient’s needs after discharge. 

Hospitals now track readmissions, adverse events, population health, and patient engagement efforts to comply with the value-based payment model. The goal is to decrease the cost to the U.S. government and to increase the quality of care for patients to live longer, healthier lives.  


The Benefits Of Value-Based Healthcare
Janine Kelbach

Janine Kelbach, RNC-OB is a freelance writer and owner of WriteRN.net.