Value Based Healthcare and Implications IT

The Transition to a Value-Based Healthcare System and Implications for Healthcare IT Vendors

The U.S. healthcare system is currently in the midst of transitioning towards a value-based reimbursement model (compensating providers based on patient outcomes rather than services provided), presenting a significant opportunity for technology and service vendors aiding in that transition. What are the trends, why are healthcare providers willing to invest, and who is to benefit?

There is a Long-Running Trend Toward Value-Based Care

  • The American Healthcare system has historically been dominated by Fee-for-Services (FFS) reimbursement models, which compensate healthcare providers for services offered rather than on patient outcomes.
  • Over the last ~10-12 years, the healthcare system has begun to transition from FFS-dominant to value-based, where both public insurance plans and commercial payers consider the outcome and quality of care provided when determining reimbursement amounts.
  • This transition is currently in the early stages today, with many different models for value-based systems in the process of being tested and evaluated.

Healthcare Providers are Willing to Invest in Value-Based Care Tools

  • Healthcare providers have demonstrated a significant willingness to spend on solutions that help them implement value-based care models.
  • Solutions that help providers reduce costs, increase efficiency, and mitigate risks while improving patient outcomes are highly attractive, as value-based care models drive providers to become hyper-focused on their practices.
  • Hospitals, in particular, have demonstrated a significant willingness to invest in partnerships that can help reduce patient readmissions within 30 days (and the attending reimbursement penalties). For example, some hospitals have contracted with home health providers to proactively treat at-risk patients and prevent ER visits, with contracts more profitable to the home health agency via hospital bonus payments than their own patient reimbursement contracts.

Technology and Service Offerings That Support Value-Based Workflows Stand to Benefit

  • Technology and service offerings that are able to aid providers in the shift to value-based care models and that contribute directly to provider profitability are highly likely to see significant growth moving forward.
  • Tools such as physician scorecards, adaptive training modules, modules to integrate health data and predict care requirements, and EHR integrations supporting interoperability between healthcare providers are all areas that are likely to see direct benefits as a result of the transition to value-based care.

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