Value-Based Care Compared to Other Approaches

Value-based care

Value-based care is a provision model that motivates providers of healthcare systems to focus on the excellence of services provided rather than the quantity. In a value-based medical care framework, medical facilities are reimbursed depending on patient healthcare outcomes. Medical professionals who participate in value-based care contracts are paid for healthcare services, lowering chronic conditions burdens and aiding their patients in living healthier lives (Hirpa et al., 2020). Value-based healthcare efforts are critical for a more thorough quality-improvement plan that alters how medical care is provided and settled. According to the “Centers for Medicare and Medicaid Services” (CMS), value-based care promotes the triple goal of better individual care, more excellent community health, and lower costs.

The Purpose of Value-Based Care

As in any organization, the purpose of value-based care is to streamline healthcare procedures through best practices. Thus, laying the groundwork for a “care pathway” that will assist patients in achieving the most outstanding possible outcomes. In value-based care, the well-being of individuals and the prevention of diseases are also emphasized (Teisberg et al., 2020). Health prevention (smoking cessation, food and healthy choices, exercise, and so on) decreases the need for costly testing, treatments, and prescriptions. Keeping people healthy lowers healthcare expenditures for everyone. For example, if individuals have chronic ailments like diabetes, value-based care enables them to avoid complications. Instead of visiting many institutions for treatment, individuals might work with a single integrated team already familiar with their medical history.

Rewarding in Value-Based Care

Doctors and hospitals are rewarded based on outcomes rather than the number of procedures performed, patients seen, or the amount they are charged under the value-based care approach. Payments are packaged rather than charging patients for each test or service, which is especially advantageous in more complex circumstances like joint replacements. Each patient’s electronic medical records avoid redundant and needless tests and procedures. VBC helps doctors and other healthcare professionals interact with one another to treat patients more efficiently and with less time lost (Hirpa et al., 2020). Value-based care enables patients to move more swiftly in healthcare systems’ integrated systems. Additionally, Value-based healthcare has a long-term goal of lowering healthcare costs, enhancing care quality, and, most importantly, enhancing the overall health and well-being of patients.

Advantages of Value-Based Care

Unlike the fee-for-service approach, value-based care inherently incentivizes caregivers to be more effective in reducing unnecessary expenditures. Providers are more willing to invest in more effective and less expensive choices like telemedicine and automatic check-in procedures. The focus has switched from symptom treatment to a more comprehensive patient care system. While the initial expenses of these innovations may be high, the long-term benefits they provide will show that they are worthwhile. The win-win situation value-based care creates for both patients and providers; whatever is cheaper will be cheaper for the other (Houlihan & Leffler, 2019). Its core concept emphasizes the quality of treatment offered rather than the quantity.

Patient Experience in VBC

A healthcare business that provides value-based treatment with a greater rate of patient experience is more likely to maintain patients while also achieving higher score metrics than its competitors. A medical care firm with streamlined processes and less waste is more likely to retain top people. While fee-for-service models generate a competitive relationship between diverse healthcare stakeholders, such as providers and payers, a value-based care system brings these institutions together under one banner and shares risk equally (Penner, 2017). The shared risk and savings programs provide a more consistent distribution of cash and resources across numerous healthcare sectors or facilities in an “Accountable Care Organization” (ACO).

Value-Based Care Versus Fee-for-Service

Value-based care differs significantly from fee-for-service and capacitated approaches. To start with, in value-based care, reimbursement is reliant on the value of care offered. On top of it, this settlement is tied to the patient results (Teisberg et al., 2020). Value-based care prioritizes the quality of outcomes and incentivizes health professionals to prioritize patients by tying reimbursement to this parameter. On the other hand, Fee-For-Service (FFS) payment is based on an agreed-upon price schedule that stipulates what each service is worth paying. In FSS, activities not on the list may not be reimbursed because suppliers maximize their returns by offering additional services.

Fee-For Service

FFS has advantages like guaranteeing unrestricted access to care and the most excellent possible care and providing marginal payments over the marginal cost of care. However, there is a risk that providers will generate too much care, that is, the treatment that does not give any meaningful marginal medical paybacks (Houlihan & Leffler, 2019). Prices are set in advance for every service; medications, imaging, and examination fees are paid after completing the service. The fee-for-service payment approach is widely used in ambulatory care, particularly in the private sector, with positive results. Patients are more content with their healthcare access in these circumstances, and clinicians can give quality health care, resulting in patient satisfaction.

Capacitation Approach

A capitation program is a payment approach based on performance by creating a system that fosters efficiency and cost management while motivating better health care. When healthcare providers are paid for quality over quantity, they cannot deliver adequate treatment that keeps individuals healthy and interested. A fixed charge is previously remitted to a healthcare provider or insurer at pre-planned intervals for medical services for competent people in any capitation scheme (Penner, 2017). It exposes practitioners to the danger of encouraging more successful methods of operation failures, for which it suffers losses if the pre-determined cost is surpassed.

Adopting Value-Based Purchasing

Adopting value-based purchasing arrangements is beneficial to physician groups and health plans, including a harmonized approach to care, patient satisfaction, cost reduction, promotion of healthy habits, reduced medical mistakes, and proactive care. Consumers of health care are dissatisfied because they are left accountable for taking care of themselves in many circumstances. However, with Value-based care purchasing, they feel valued and involved in the value-based purchasing model as an integrated care team backs them (Penner, 2017). Value-based purchasing strategies bring together data on medical costs and health outcomes so that medical administrators can use it to make decisions. In theory, value-based buying strategies should lead to improved healthcare services, enhanced insurance satisfaction, and more competitive medical providers.

Core Goal of Value-Based Purchasing

Value-based buying aims to reduce clinical mistakes and reward top-performing healthcare organizations. Patient satisfaction is a crucial component of pay-for-performance measures and a key indicator of care quality. Thus, it can lead to higher patient satisfaction, a sign of good service. Furthermore, providers that help their patients improve their quality of life, counteract the effects of chronic illness, and live healthier habits are rewarded under value-based care agreements (Hirpa et al., 2020). In VBC, patients are divided into divisions according to their health needs. Hence, it gives nurses and clinical professionals ample time managing patients. Correspondingly, it is beneficial to physician groups because it reduces the money used in identifying the various categories patients should be grouped.

Value-Based Purchasing on Buyers

Value-based care systems benefit payers because the risk is dispersed across a more comprehensive patient group, lowering costs. A healthier society with few claims means fewer insurance pools and investments are drained. Payers benefit from value-based payment since it bundles reimbursements covering the patient’s whole treatment cycle. Suppliers profit from connecting their services and goods to improve patient experience and minimize costs (Penner, 2017). Healthcare stakeholders advocate for drug manufacturers to tie drug costs to their authentic value to individuals, a procedure that is anticipated to get easier as personalized therapies become more common. Furthermore, under Value-Based Purchasing, suppliers do not face the same financial risk, unlike fee-for-service schemes.


There are substantial dissimilarities between a value-based health strategy and Fee-For-Service (FFS) and capacitation approaches. Healthcare providers are rewarded according to the number of services delivered under the FFS model. Office visits, testing, procedures, and other treatments are examples of these services. Reimbursement rates are defined for each service that professionals offer. Clinicians are compensated for each service independently under the FFS. In the capacitation model, the insurer may attempt to minimize beneficiaries’ use of high-cost physicians by imposing restricted forums or high co-payments and transmitting some financial risks to caregivers to urge them to be more efficient.


Hirpa, M., Woreta, T., Addis, H., & Kebede, S. (2020). What matters to patients? A timely question for value-based care. Plos one, 15(7), e0227845. Web.

Houlihan, J., & Leffler, S. (2019). Assessing and addressing social determinants of health: a key competency for succeeding in value-based care. Primary Care: Clinics in Office Practice, 46(4), 561-574.

Penner, S. J. (2017). Economics and financial management for nurses and nurse leaders (3rd ed.). New York, NY: Springer Publishing.

Teisberg, E., Wallace, S., & O’Hara, S. (2020). Defining and implementing value-based health care: a strategic framework. Academic Medicine, 95(5), 682.

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