HIMSS News

Movement from “Fee for Service” to “Fee for Value”

By Alan Gilbert, MPA, FHIMSS, Managing Partner, Health Catalyst Consulting, LLC

Today's movement towards a "Fee for Value" environment demands a proven model to systematically improve care outcomes and reduce costs across the Continuum of Collaborative Care.  Fee for Value Initiatives include Accountable Care Organizations, Patient Centered Medical Homes, Health Homes, Bundled Payment, Clinical Integration, etc.  Each of these require a robust I.T. infrastructure across the continuum of “cradle to grave” care including HIEs, EHRs, Hospital Information Systems, Labs, e-Prescribing, Medical Device, and Diagnostic Imaging systems. The paradigm change from “Fee for Service” to “Fee for Value” necessitates the establishment of multi-disciplinary, multi organizational team based care models to actively manage emerging care plans, care delivery, and compliance with evidence-based care practices across a wide-variety of providers and care settings.  Below are three observations about “Fee for Value” Initiatives:

 

“Fee for Value” is Driving Change

New Reimbursement Models have created the need and incentive for New Care Delivery and Payment Paradigms. The most complex patients in our healthcare system are also the highest cost.  A larger percentage of patients with chronic diseases – diabetes, COPD, CHF, obesity, and cancers - have multiple co-morbid conditions and require care from a wide variety of providers in multiple settings. For years we have known about impacts to cost and quality of care relating to lack of continuity between different providers, unnecessary costs from redundant tests and treatments, and significant differences in care practices that yield significant variation across the healthcare system. Reimbursement for Collaborative Care can compensate care givers for the additional planning, communication, and follow up needed to improve health outcomes and reduce costs.

 

Active Coordinated Care is the New Paradigm

Better health and efficient delivery require comprehensive, integrated, and coordinated care that is organized and managed for maximum effectiveness. Risk bearing care teams must manage the plans, delivery, and compliance with evidence-based care practices across a wide-variety of providers and care settings. To be successful, “Fee for Value” reimbursement arrangements require a model to systematically guarantee improved care outcomes while reducing costs of care.  Participants need capabilities to make sure that everyone is doing their part – patients and providers alike.  Demonstrating usage and compliance with shared plans of care for specific populations will lower risk of variation, allowing the risk bearing entity to match right services with the right cost across the covered population. Work activities are distributed based on plans, alerts, and results to the entire Multi Disciplinary, Multi Organizational Care Team.

 

Value: Systematically Achieve Better Outcomes at a Lower Cost

Team Based Care enhanced by technology yields better patient and provider adherence and compliance to care plans.  This enables continuity, speeds the healing process, eliminates waste, and provides better information for future care encounters.  Higher quality = Lower costs. Active management of the best protocols for all of your patients, including those with chronic diseases will:

  • Increase provider adherence and compliance with evidence based practices.
  • Increase patient adherence and compliance with care plans.
  • Reduce hospitalizations.
  • Reduce length of stay.
  • Avoid unnecessary readmissions.
  • Avoid redundant tests and studies.
  • Improve utilization management for drug therapies and device therapies.

 

Achieving the full benefits of Collaborative Care is an evolutionary process.  There will be a progression from “Fee For Service” to “Fee for Value” being the dominant reimbursement model. Careful planning allows organizations to manage the parallel requirements of both methodologies at the same time.