While the move promises to cut costs and improve patient outcomes, change has come more slowly than expected, and many leaders aren’t sure what to do amidst the stalled progress.
For as long as the United States has had a healthcare industry, providers have relied on a “fee-for-service” approach in which they bill insurance companies or the government for each service or treatment. This model has promoted innovation and built a powerful healthcare system. Life-saving medications, diagnostic tools, and procedures have emerged as a result. But this regime has produced unintended consequences, including high costs and reductions in quality of care. The conventional model has driven providers, particularly large organizations, to focus on expensive treatments rather than disease prevention and efficient care coordination.
A new model centered on value
Fortunately, the healthcare industry has been steadily shifting toward an alternative system known as “value-based care” that reimburses providers based on quality and outcomes. Compared to fee-for-service, this approach holds the promise of simultaneously providing better care for individuals, improving population health management strategies, and reducing healthcare costs. Value-based care leads to fewer missed appointments, opportunities for home-based services, smoother transitions between providers, and social services that promote better health.
It turns out that considering a patient’s experience, transitions of care, and overall journey matters not only in a value-based reimbursement system, but also in our current fee-for-service world. Besides leading to healthy patients, delivering personalized and high-quality care is vital for providers who want to stand out in an increasingly competitive playing field. Patients today are educated consumers who expect transparency, easy-to-use systems, and clear results. They have more choices than ever about where to receive care, and more pathways to provide public ratings and feedback. Whether or not it’s tied to a value-based contract, providers who want to attract patients and succeed need to consider customer satisfaction and brand loyalty.
Despite the advantages of value-based care, expansion of the model has been slow. According to research from Quest Diagnostics, more than two-thirds of primary care and health plan executives agreed that the country still has a fee-for-service system, a slight drop from the previous year. One of the key reasons is the financial and operational risk involved. Another important variable, the report suggests, is that doctors lack the technology and data they need to succeed under the new model. In fact, nearly 60 percent of executives surveyed said their doctors didn’t have the right tools to be effective, and the same share of doctors said electronic health records didn’t contain all the data they needed to care for patients.
Why data is key to unlocking the promise of value-based care
Investing in the right tools to manage and share data across stakeholders can help push healthcare toward a greater focus on value. Through a combination of clinical care and adjacent support systems, organizations will increasingly consider a patient’s health and life in a broader context than before. This focus on value requires, for example, getting patients to quit smoking to reduce lung cancer risk, ensuring those with high blood pressure take medication and work toward healthier lifestyles, and understanding the concerns of a patient about to undergo surgery. This requires solving the challenge of collecting, analyzing, and deploying data and enabling communication and collaboration.
A comprehensive data set includes interactions not only with physicians, but also with nurses, social workers, people who deliver durable medical goods, and home health aides. Ideally, it also incorporates information about care at other facilities and home remedies. Bringing together data from multiple organizations and the perspectives of a variety of health professionals enables the wisest course of action for the patient as a whole. Incorporating data on patients’ socioeconomic milieu is also vital to predicting their health risks and identifying the most effective intervention strategies. Gathering timely feedback—quantitative information from devices and other systems, as well as subjective feedback through surveys and conversations—helps providers evaluate and potentially adjust the interventions. And having a standard set of procedures and workflows enables improvement and, along with the aforementioned data, enables tailored interventions.
Roadblocks to making the most of data
Why has it been so hard for the healthcare industry to successfully share and manage the kind of comprehensive data that other industries have mastered? One formidable obstacle is culture. Our profession has reasonably focused on science and treatment, but seems to be relearning that relationships matter and that an individual’s life context is key to successful prevention and treatment. Another roadblock is the state of much current medical infrastructure and technology, which was built to support the treatment of severe conditions rather than promote health and wellness. Most hospital IT and electronic medical record systems still aren’t adept at sending messages, enabling a delightful experience, or offering regular emotional support for people tackling important health challenges.
Another obstacle is that a growing number of patients are skeptical about sharing data given perceived risks to their privacy and personal autonomy. The industry is also feeling immense uncertainty and pressure in the healthcare market, an irresolute regulatory environment, and real losses experienced by some organizations that migrate to value-based contracts. Finally, collecting and deploying data for value-based care is hard. Healthcare systems are dealing with thousands of diseases, complex social and psychological circumstances, and geographies with divergent policies, making it tricky to truly understand patients and deliver an optimal health product.
The way forward
Just collecting data is fruitless—in order to discern insights from it, organizations need the right systems in place. This means deploying tools that integrate data, contain embedded analytics and artificial intelligence, and enable organized workflows. These technologies are widely used in retail, advertising, sales, and many other fields. The pursuit of health, however, has no finish line, so the goals are more complex and long-term. Healthcare systems will not deliver true value until they employ a unified platform that can gather comprehensive data, analyze it, provide recommendations in real time, and integrate feedback.
When looking to implement these technologies, further considerations bear uniquely on healthcare. The field doesn’t enjoy the capital and operational advantages of many other industries. The greatest strides are coming from startup providers that are more nimble and modern in their operations and free of legacy technologies. Conversely, major health systems, academic hospitals, and physician practices face substantial friction when adopting new technologies and programs. The answer for many is to focus on short-term challenges with an eye toward building future capacity. For example, call centers, marketing solutions, and communications systems can be deployed to solve near-term tactical problems, such as bringing more patients into urgent care or to a mammogram program. Over time, these systems could expand to include new clinical domains, more kinds of data, sophisticated analytics, collaboration across organizations, and engineered workflows.
There is no shortage of vision when it comes to value-based care, but making the transition away from traditional payment models has proven challenging. Employing the right tools to collect, share, and use data will be key for the new model to live up to its promise. Change won’t happen overnight, but moving forward requires solving the problems of today while building toward better systems for tomorrow. In the end, the better we know our patients, the more we can deliver the ultimate value of health and well-being.
