Value-based care: How some providers are ahead of the game

For those who don't know what 'Value-based care' is, it's an initiative started a few years ago by the Center for Medicare & Medicaid Services (CMS) to reimburse providers based on the quality of care they provide, not based on the volume of services (this was the previous approach, called fee-for-service, and led providers to provide more care than needed).

I analyzed the workings of the Oncology Care Model (OCM) at one of the health systems in Virginia. The software they used was very helpful in identifying, in real time, which type of cancer patients have more inpatient utilization and the average expenditure for each admission. Report gives the ER utilization summary detailing the number of episodes and how many were ER visits. Program administration team looks at this on a weekly basis to identify what immediate steps are needed to reduce the episodes of ER visits which in turn reduces the cost of care.

CMS also provides quarterly reports to all participants in the OCM outlining how many of its patients were covered by the practice and the average expenditure per episode. They provide a comparison with other OCM participants. This information is also very useful to the Medical Director and gives them specific areas to focus on but the only downside is that the information is provided after 1 or 2 quarters have passed. So there is no immediate benefit to the hospital.

There were 195 physician groups and 17 payers that participated in this program and this is intended to run for 5 years. Results from this pilot will help CMS set benchmarks for future when all the providers need to adhere to this program. Being one of the first participants in such programs could be hugely beneficial for the bottom line of the health system. Taking such an innovative approach can help their voice to be heard by CMS. If hospital administrators want to lower the cost of providing care, this is one approach they should look into.

PS: I'm always open to comments on this article. It will help me learn and get new perspectives from people in the industry. Thank you.