Value-based purchasing is where payment is linked with patient improvement. Under this scheme, payments are derived by measuring treatment outcomes against the total cost. Under value-based purchasing, health providers are paid to improve the patient’s condition and reduce disease effects. It aims to reward best-performing health employees and ensure patients are treated well. However, Value-based purchasing has advantages and downsides.
Pros of Value-based purchasing
Here are the benefits associated with value-based purchasing:
1. Pay for performance. Unlike the Fee-For-Services mode of payment, the patient pays for the service offered in value-based payment. This mode of treatment is more focused on the well-being of the patient and the improvement of his health condition. Due to this, the health provider is rewarded according to their performance. Therefore, it plays a vital role in improving patient services. Secondly, value-based purchasing helps eliminate health providers concentrating more on making a profit.
2. Quality care. The payment is made based on the provider’s quality of care and the patient’s health improvement. Since improving a patient’s health determines the payment, health providers work tirelessly to improve the patient’s health condition. This leads to improved services and quality care provided by health organizations.
3. Rewarding health care providers. A value-based purchasing scheme rewards health care providers who provide the best care. The awarding program helps to improve the quality of services offered by the Health care providers to patients. The program recognizes hardworking healthcare providers, unlike other programs where all healthcare providers are paid equally. Therefore, this motivates healthcare providers
4. Reduction of the treatment cost. The health care providers can enjoy the benefits of cost savings. Under value-based purchasing, the medical organization can quickly assess and monitor the treatment plans. This helps in understanding how payments are made and how finances are allocated. Secondly, care providers are rewarded according to the services they offer. This helps to minimize the extra cost that would be incurred by rewarding all care providers.
5. Better treatment outcomes. Value-based purchasing treatment aims to improve the patient’s health condition. This program is geared towards ensuring the patient’s health is improved. Thus medical organizations ensure patients have a positive experience. Unlike fee-for-service, in value-based purchasing, treatment payment is made based on improving health conditions.
6. Prevention and management of chronic illness. Value-based purchasing program provides proactive measures for preventing and creating awareness of the chronic illness. The program also aims to manage such illnesses to improve the patient’s health.
7. Improved care and management. Treatments data and patient engagement help in improving the quality of services provided to patients. The organization can access and track the data, which improves care and operation. In addition, the organization can foresee future risks and plan to cope with them.
8. Attract more patients. Value-based purchasing scheme is likely to attract more potential patients than a fee-for-service scheme. In value-based purchasing, the quality of treatment heavily outweighs service payment. Thus, many patients will likely go where the services are offered better.
9. Value is the benchmark for insurance companies. Health care providers who use the value-based purchasing scheme are likely to enjoy the benefits of low insurance costs. Health care’s pay is based on the value they offer rather than volume, as in the Fee-for-service scheme.
10. Health providers are more accountable. Unlike fee-for-service, under the value-based purchasing scheme, the health providers are more accountable for the quality and the entire cost. Patients can receive better and quality treatment, which cuts down the total cost of treatment.
11. Positive impact on suppliers. With the positive outcomes and low cost associated with value-based purchasing, health care providers are in an excellent position to support and advertise their services.
Cons of Value-based purchasing
Below are the downsides associated with value-based purchasing:
1. Increased patient load. Value-based purchasing has several advantages that outweigh the number of disadvantages. Because of this, the number of patients is likely higher than that of available doctors. Work overload may lead to poor services and low-quality care for patients.
2. Lots of data is required. Unlike a fee-for-service scheme, navigating to a value-based purchase scheme requires a lot of data containing the patient’s personal information and treatment details. It may not be easy to gather and manipulate these data.
3. Tough working environment. Value-based purchasing schemes may lead to a tough working environment for physicians and other health providers. This scheme is more demanding than other treatment schemes, and thus the health providers may have a stricter working environment.
4. Lack of transparency. The awarding program in this scheme has led to irregularities and a lack of data transparency. Most physicians and other providers are after the awards; thus, they care less about the quality of care they offer to patients. Because of this, they end up giving opaque data to the organization. If this is not controlled, it can damage the image of the health care organization.
5. Status quo. Most health care organizations operate on a Fee-For-Service scheme where the payment depends on the volume, not the value. It is believed to be the best way to earn more profit than investing in a value-based purchasing scheme. Therefore, most health providers will go for the fee-for-service scheme.
6. Complicate health problems. Some complicated and serious health problems can pose the health provider at greater risk. Most hospital and home value-based purchasing schemes handle common and less complex diseases. In the case of a more complex disease, the physician may not be in a position to handle it. The patient may be directed to other healthcare providers where they can be treated.
7. Misleading the patient. This program can easily mislead their patients. If the patient is undergoing a severe health problem, they may be directed to other healthcare providers charging more or having poor quality care.