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Traditionally, healthcare in the U.S. has been based on a fee-for-service reimbursement model, where providers are paid for each service delivered to patients. The problem with this model is that pay is tied to volume, not outcomes— in fact, providers are incentivized to perform extra testing and procedures, emphasizing treatment at the expense of prevention and wellness.
To address this misalignment in incentives, healthcare has been moving toward a value-based care (VBC) model, where pay is tied to outcomes and providers are financially rewarded to keep patients healthy. As described in the Health IT Playbook of The Office of the National Coordinator for Health Information Technology (ONC), value-based programs support better care for individuals and better health for populations at lower cost. The ONC goes on to report that VBC programs reduce the “perverse incentive” to increase volume of care, thereby making it possible to reward clinicians who:
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Emphasize prevention and wellness
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Focus on outcomes
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Help patients navigate the healthcare system
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Integrate and coordinate care
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Invest in practice transformation, such as health information technology