Value-Based Care Vs. Fee-for-Service

Fee for service and value based care are seen as polar opposite systems in the healthcare industry. There are different goals or motives that drive the uses behind both.
In 2021, 60% of healthcare payments were tied to value and quality-based care while 40% were from fee-for-service models. While we are seeing an increase of usage in the value based care system, fee for service follows not too far behind.
It’s important to address both. They are widely used and utilized for different purposes. So let’s take a look at what they are and how they differ.
What is Fee for Service? In regard to a fee for service practice, think quantity over quality.
A practice that uses a fee for service model charges clients separately for each service they receive. This includes office visits and any kind of testing.
An incentive for practices that use this method is to provide more services in order to receive more revenue. This is where that quantity over quality analogy comes to play.
Say you are a dental practice that offers a variety of services such as teeth cleaning, teeth whitening, x-rays, and so on. All of the services would be billed separately or viewed individually on the patient’s bill that receives these things. Those services can rack up.
So Why choose it? Some benefits include higher revenue, more management behind pricing, and strong relationships with clientele.
Fee for service has been around for quite some time dating back to the 1930’s. Value based care, introduced in the late 60’s, was created as a solution to rising healthcare costs and reduced quality of care.
When unnecessary services exist and the quality of them isn’t sufficient, less business may be the result.
Let’s move onto the value based care system.
There’s a focus on the patient experience. Patients are seen at the center here.
Healthcare providers are held more accountable for patient outcomes. For value based care think the opposite of fee for service: quality over quantity.
Quality of care as well as provider performance are significant factors taken into consideration. The amount of money that providers receive depends on those factors.
Since 2021, this is a model we’ve seen more and more practices begin to follow. The goal is to achieve better care for individuals, better health for populations and all at a lower cost.
In order to achieve a value based care system a few things need to take place.
A lot of analysis and understanding comes with putting this model into application. You have to understand your clients needs in order to be able to treat them better or make things more convenient.
Data managing skills are very important. A strong IT infrastructure is needed in order to identify those areas where you are lacking, figure out how you are going to improve, and then measure improvements, and evaluate. You can’t just hit the ground running.
You also need to have access to patient history and information in order to promote better care coordination or reduce medical errors. It takes a team effort to make the benefits of value based care come to fruition…but as they do the pay off can be seen from a mile away.
According to Humana, 2022 showed a record 70% of Individual Medicare Advantage patients aligned with value-based care providers.
If you’d like to learn more about fee for service vs value based care reach out to etactics. And you already made it this far into the video so you might as well like it, share it and comment below.
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