value based reimbursement models in healthcare

Value-based reimbursement models are becoming more common in healthcare. Value-based models structure reimbursements according to metrics like efficiency, cost, quality, and patient feedback (Pennic, 2014). Some of the most commonly used value-based reimbursement and payment models include Medicare Quality Incentive Programs, Pay for Performance, Accountable Care Organizations, Bundled Payments, Patient-Centered Medical Home, and Payment for Coordination (Pennic, 2014). More traditional reimbursement models include standard fee-for-service systems, which are woefully inefficient for patients with chronic conditions due to the large number and type of treatments needed (Sanghavi, George, Samuels, et al, 2014).

While there is no one preferred approach to reimbursements, value-based models are clearly superior to fee-for-service models. One of the most promising value-based reimbursement models is the Patient-Centered Medical Home model. This model tends to be more culturally-appropriate than others, taking into account individual and family needs, community diversity, and other contextual variables that might impact patient health outcomes (Pennic, 2014). Like other value-based reimbursement methods, the Patient-Centered Medical Home relies on a team-based, collaborative decision-making process. Therefore, it does require collaboration and communication between healthcare workers assigned to each patient.

The potential drawbacks of miscommunication and lack of coordination can be effectively resolved through the efficacy of the Patient-Centered Medical Home principle, which establishes a stable point of care, such as a primary care physician that ensures continuity of care across multiple platforms. Moreover, the Patient-Centered Medical Home model allows for the introduction of holistic care and regular checkups that promote preventative care. Another patient-centric model that is useful for some, but not all, cases is the bundled payment or episode of care model.

More useful for patients with one-time needs, the bundled care model covers all procedures for a specific condition under one rubric. There are clear benefits for bundled care for one-off surgeries like hip replacements or cataract surgery, heart surgery, or for pregnancy and childbirth (Valence Health, n.d.). However, cost accounting can become complicated when ancillary services are needed or when complications arise. The bundled care model also does not meet long-term needs and does not cover preventative care.

Yet some patients may prefer the bundled care option when they are generally healthy and prefer not to access the healthcare system throughout their lives. The Patient-Centered Medical Home model, on the other hand, does require active patient participation in healthcare. The Patient-Centered Medical Home model shares much in common with the Accountable Care Organization in that both are team-based. The difference is that Accountable Care Organizations are not patient-centered. Decisions are made based on metrics and targets and are not necessarily conducive to chronic care needs.

Medicare Quality Incentives are similar to Accountable Care Organizations in that they rely on metrics and are not patient-centric; the provider simply gets rewarded for quality performance. Pay-for-performance models are similarly structured. However, Accountable Care Organizations have been known to reduce medical errors and are generally effective at delivering higher quality patient care than other reimbursement models (Pennic,.