Value-Based Care vs. Fee-For-Service 

Value-based care and fee-for-service refer to two different models of healthcare delivery that define how healthcare providers are compensated for the care that they provide. In a fee-for-service model, healthcare providers are paid for each service or procedure they perform (5). Fee-for-service has been the standard model of healthcare for many years, but it has come under scrutiny for its potential to drive up healthcare costs, contribute to the overuse of services, and devalue quality compared to quantity. Value-based care has been offered as an alternative to fee-for-service that focuses on the quality of care delivered to patients, rather than the quantity of services provided (5). Value-based care incentivizes healthcare providers to focus on prevention and keep patients healthy, rather than treating patients after they are already ill. 

Value-based care can be defined as a payment model in which healthcare providers are paid based on patient health outcomes (5). Physicians and other providers give a patient “value” when they create improvement in that patient’s health outcomes by improving their functionality and quality of life and providing emotional and physical relief from their symptoms (3). In a value-based care model, providers may be more focused on, and thus more effective at, helping patients achieve better health and implement healthier habits that can protect them from illness (5). 

Value-based healthcare offers the possibility of improving patients’ quality of care and boosting population health at a large scale. A core pillar of value-based care is the idea that a multidisciplinary team of healthcare providers and other staff should work together to deliver coordinated, comprehensive care (3). This multidisciplinary team may include physicians, pharmacists, psychologists, dietitians, and members that don’t directly provide care to patients, such as case managers and social workers (1). These team members work collaboratively to help the patient improve their health outcomes, providing support with navigating the healthcare system at every step (5). Furthermore, value-based care emphasizes prevention and wellness strategies that can reduce the incidence of chronic illness and long-term conditions, resulting in a healthier population and reduced healthcare costs (1). 

At present, fee-for-service remains the longstanding healthcare delivery system in place. Transitioning to a value-based care system from a fee-for-service system would require a significant amount of resources and buy-in from healthcare staff members and executives (1). Furthermore, the healthcare delivery infrastructure currently in place does not have the capacity to support multidisciplinary care structures and value-based care at a large scale. 

Fee-for-service may still offer some benefits. For example, proponents of the system say that the model incentivizes providers to work quickly and efficiently, ensuring that patients receive prompt care. However, the current model is highly flawed, and implementing value-based care may make healthcare more equitable and accessible to diverse populations and ensure that healthcare provides measurable benefits to patients. 

In order to implement value-based care at an organizational level, hospitals need to design coordinated solutions that can meet the needs of high-risk patients (3). Most importantly, caregivers must collaborate to address both clinical and nonclinical factors affecting patients’ health outcomes (3). Nonclinical factors that are often overlooked by the current healthcare delivery model include environmental factors, socioeconomic status, transportation, and lifestyle factors like smoking and alcohol use. Additionally, healthcare organizations can keep track of the cost of their care compared to the health outcomes that result from their services in order to improve the cost-efficiency and effectiveness of their care (3).  

References 

1. Balasubramanian, Sai. “What Is Value Based Care, And Why Is The Healthcare Industry Suddenly So Interested In It?” Forbes, 25 Dec, 2022, www.forbes.com/sites/saibala/2022/12/25/what-is-value-based-care-and-why-is-the-healthcare-industry-suddenly-so-interested-in-it/?sh=770211e855d2 

2. “Implications of Value-Based Care, Fee-for-Service Reimbursement Models Amid COVID-19.” AJMC, 1 Mar 2021, www.ajmc.com/view/implications-of-a-value-based-care-fee-for-service-reimbursement-model-amid-covid-19 

3. Teisberg, Elizabeth et al. “Defining and Implementing Value-Based Health Care: A Strategic Framework.” Academic medicine : journal of the Association of American Medical Colleges vol. 95,5 (2020): 682-685. doi:10.1097/ACM.0000000000003122 

4. Werner, et al. “The Future of Value-Based Payment: A Road Map to 2030.” Penn Leonard Davis Institute of Health Economics, 17 Feb 2021, ldi.upenn.edu/our-work/research-updates/the-future-of-value-based-payment-a-road-map-to-2030/ 

5. “What is Value-Based Healthcare?” NEJM Catalyst, 1 Jan 2019. catalyst.nejm.org/doi/full/10.1056/CAT.17.0558