Value-based care is smarter healthcare that lowers costs and keeps Medicare Advantage members healthier, according to the tenth annual Value-Based Care Report released today from Humana Inc. The 2023 report shows that Medicare Advantage (MA) patients receiving care under value-based arrangements spent more time with their primary care physician and were more likely to receive preventive care, with fewer hospitalizations. Meanwhile, physicians working under the value-based model are more empowered and better positioned to coordinate care while prioritizing outcomes over the quantity of services.

As Value-Based Care expands, payers are emphasizing cost reduction all the more. Newer CMS payment models like ACO REACH reinforce cost control by capping reimbursement in total global payments to ACOs. In turn, global payments enable ACOs to directly negotiate rates with preferred provider specialists. In addition to focusing on controlling costs delivered through primary care, your ACO should pursue strategies to stem total patient care costs (TCC) through specialty services. Between 40 to 60 percent of total patient care costs are driven by specialty physicians. While rate negotiations address the price of individual specialty services, the greater opportunities lie in addressing cost variation of services, outcomes that drive up utilization and cost, and avoidance of low-value services.

Health systems redesign value-based care

Becker's Hospital CFO Report |

November 15, 2023

Big Tech and retail giants continue to expand into healthcare, investing more money in value-based care and putting more pressure on hospitals and health systems to bend the cost curve and prioritize digital health investments capable of providing value. With more competitors entering the sector —- and patients increasingly shopping for the best value for their care —- hospitals and health systems are upping the ante when it comes to the shift away from fee for service. Health systems, many of which are beginning to see margins increase after a tumultuous three years, also see success in value-based care models as the key to ensuring long-term financial sustainability.

Clinical factors are responsible for just 20 percent of individuals’ health outcomes; the remainder can be attributed to factors such as health-related social needs (HRSNs). Increasing recognition of the impact of these needs on consumers’ health and livelihoods is driving momentum across the healthcare ecosystem to integrate health and social care, creating opportunities for healthcare entities to design consumer-centric models of care tailored to individual needs and preferences. This article synthesizes insights gleaned from a survey of more than 5,000 US consumers that highlights how HRSNs are evolving; their potential impact on healthcare use, preferences, and outcomes; and actions healthcare entities may consider to effectively support consumers’ needs.

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