Value-based care or fee-for-service (FFS)? It’s a classic quality versus quantity debate. Should healthcare companies be paid for (a) the number of services they provide or (b) the quality of care they provide?

From a big picture perspective, the better option is value-based care. Incentivizing quality of care versus quantity of services? That’s a no-brainer. Value-based care was designed to reduce costs and improve the population’s health. If it’ll make our country healthier, why not reward or penalize healthcare providers based on their performance?

That’s certainly the direction the industry is moving.

But, as many healthcare companies can attest to, implementing a value-based care model after decades of FFS is much easier said than done. Switching to value-based care is a total structural overhaul. You can’t snap your fingers and make such a significant change.

Where do payers and providers lie on the continuum?

Change Healthcare’s 2020 industry survey asked respondents to indicate the level of value-based care their companies provide. Possible answers were (1) FFS with limited or no link to quality, (2) FFS with a portion of payments linked to quality, (3) alternative payment models, and (4) full capitation (i.e. no FFS).

The results? Payers showed promising progress, as 62% indicated they’ve adopted alternative payment models, 9% offer full capitation, while only 4% offer FFS with limited or no link to quality.

Providers are lagging a little, as 43% indicated the adoption of alternative payment models and only 2% offer full capitation. As a result, more than half (55%) reported FFS models with no link or only a small link to quality.

What’s stopping value-based care from spreading?

The digital age certainly makes it possible for a value-based care model to work. Specifically, due to the advancement of data collection, analysis, and implementation. How else would a company implement and measure such a comprehensive, integrated program?

But there are still barriers to consider. Per Change Healthcare’s industry report, respondents ranked the obstacles that are preventing widespread adoption of value-based care. Here are the top answers:

  1. Unclear or conflicting performance measures
  2. Financial risk concerns
  3. Regulatory changes and political uncertainty
  4. Lack or limited IT infrastructure

These are understandable – but solvable – problems. Although it’s virtually impossible to alleviate political and regulatory uncertainty, performance measures can be adjusted or clarified and financial risks can be mitigated.

To increase adoption of value-based care, respondents cited various solutions, such as standardized performance quality metrics, risk management programs (co-developed by payers and providers), and shared data. Each of these initiatives require industry-wide accord between payers and providers.

What else do you think can be done to advance the development an adoption of value-based care?