Healthcare News & Tech

Value-Based Care & Healthcare Spending

September 05, 2018

Physician taking the blood pressure of a patient.

The past decade has seen a greater emphasis on improving health care, its cost and overall quality of service by providers. Rising costs for medical testing, chronic disease management, and prescription drugs have led to researchers and payers developing more affordable alternatives for restoring health and preventing health issues. One such alternative is shifting from a fee-for-service payment system to value-based care.

The concept of value-based care creates an avenue for health care providers to provide effective health care services to subscribers while tying the cost of services to value rather than volume. High-quality healthcare services with redesigned pay models aim to enable a more effective and efficient process for all parties involved.

Healthcare Spending continues to Increase

The United States is estimated to increase health spending by 5.3% in 2018, making the regulation and revamping of the current healthcare spending model essential. The estimated increase is in part due to the baby boomer generation utilizing more Medicare services. This increase will continue through the year 2026. The prices of prescription medicine are projected to increase by an even greater percentage (6.3% each year) through 2026.

The strength of value-based care is that its cost reflects the end result in services provided/administered. The priority of value-based care is the patient’s well-being. The restructured system enables patients and their health plans to pay for quality health care and services at a cost tied to patient health outcomes. Value-based reimbursement aims to incentivize providers to be more efficient in delivering options and alternatives to patients, while giving patients more clarity on what is being paid for and how it will benefit them.


Smiling, helpful physician in consultation with a patient.

Value-Based Care Initiatives on the State Level

CMS introduced two notable initiatives- the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and Protecting Access to Medicare Act of 2014 (PAMA)- to accelerate adoption of value-based payment systems. In addition to these federal-level programs, states have also taken the lead in implementing value-based payment programs.

The state of Rhode Island is working to implement more value-based care in its Medicaid program by requesting an extension of the 1115 demonstration from CMS. Specifically, Rhode Island is proposing payment changes that boost accountability measures and payment structures for home health aid services. Colorado and Minnesota have also developed Accountable Care Organization (ACO) programs to coordinate care for Medicaid and Medicare patients. State initiatives like these, whether for a specific Medicare or Medicare service, aim to reduce spending by implementing payment options that reflect the outcomes of the services and care rendered.

The Role of Technology

Technology also plays a vital role in the value-based care system. Quicker access to data and more interaction between patients and physicians are now possible through innovations in Electronic Health Records (EHR) management systems and telemedicine. For example, there is an ever-growing number of apps designed to allow providers and patients to stay in communication around treatment adherence and effectiveness.

The RehabTracker is one such app, allowing providers to track patient progress and extend moral support through more consistent, engaged communication. This personalized approach, tied to tech that produces measurable data, paves the way for facilities to better measure value when switching to a value-based payment system.

Artificial Intelligence (AI) also plays an important role in value-based care. Increasingly, operating rooms in hospitals and specialty surgery centers are using “AI-Assisted Robots” that analyze patient data and help guide surgeons’ medical instruments during surgery. Also, rapid image analysis in radiology, performed by AI, give providers real-time assessment to expedite care.

Virtual nursing assistants, another innovation, supplement the work of human nurses through their 24/7 availability to answer patient questions and monitor patient health. Automating administrative tasks is a major advantage to using AI in value-based care. The automation of tasks such as the prescribing of medicine, the charting of medical notes and the ordering of tests could all be performed with automation, greatly benefitting doctors through high-volume document analysis. These are just a few examples of how technology, and the data it generates, is accelerating the healthcare industry’s ability to shift to value-based payment systems.

The push to lower costs while increasing the quality of health care continues daily in the United States. At Advanced Medical Reviews (AMR), we root all of our work in our belief that “every patient should receive quality healthcare.” As payment systems shift and the healthcare regulatory landscape evolves, we will continue to shift our operations and compliance measures to deliver quality assurance. As noted in a previous AMR blog discussing value-based care, the aims of using value-based reimbursement as a payment model align closely with those of Utilization Review (UR). Megan Kaufman, General Manager of AMR, explains, “Value-based care and UR both strive to reimburse for the highest quality care for patients. Assessing utilization for appropriateness and necessity, as we do in our Physician-Level Peer Reviews, not only can improve care, but it can also improve your bottom line.” Learn more about value-based care on the AMR blog

Value-Based Care & Healthcare Spending