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Value-Based Care May Save the US Healthcare System

Learn how value-based care programs represent the future of the US healthcare system, and how they promote savings for patients and providers.

The US healthcare system needs a little reinvention. Patients and providers are starting to buckle under the strain of rising costs and administrative lag. Fortunately, value-based care programs are starting to take over across the country. Let’s take a deeper look at value-based care systems and why they might be the solution the US healthcare system has been waiting for.

The US Healthcare System – An Overview of Rising Costs

Most folks know that the US healthcare system is an overpriced, slow-moving machine that costs both consumers and healthcare providers far more than it reasonably should. For instance, the Perelman School of Medicine at the University of Pennsylvania has found that Americans spend over $9000 more per person in annual healthcare spending compared to the citizens of other wealthy nations like the Netherlands and Germany.

Similar pricing discrepancies exist; for example, administrative costs account for over $700 per capita for American annual healthcare spending versus over $200 in the Netherlands and Germany. In other words, there’s a huge amount of administrative bloat artificially raising costs for both consumers and healthcare providers.

This is an issue that will only become worse the longer it is left to persist. That’s why many healthcare providers are turning to value-based care programs and systems.

Value-Based Care Programs – A Possible Solution

In a nutshell, a value-based care program is a reimbursement program that connects the payment for care directly to the quality of care provided and to patient outcomes. In this way, hospitals and doctors are paid more as they become more effective and efficient, and as their patients experience better results.

This contrasts with other reimbursement models often used by healthcare providers and doctors across the US. The most traditional model is “fee-for-service”, which is a reimbursement model that inherently incentives provision of a higher quantity of services. Basically, healthcare providers get paid flat rates for each service, test, or procedure they administer.

This, in turn, motivates doctors and healthcare providers to schedule more tests, more surgeries, and more procedures than are strictly necessary for patient health. This is bad not only for the patient (who may pay more for the extra medical care) but also for the hospital or healthcare organization.

But value-based care models focus explicitly on patient outcomes. The better a healthcare provider does caring for a patient, the more they will be paid and the better their reputation will become.

How do Value-Based Care Programs Help?

They Help Providers

Value-based care models and reimbursement programs help providers by cutting down on unnecessary costs. Since providers are paid based on the standard of care they provide and patient outcomes, they make more money if they produce patients who recover from their illnesses or injuries consistently and efficiently.

The more patients they treat, the more patients they can take in, and the more money hospitals and doctors can be reimbursed for as a result. With this extra money, hospitals can expand, hire more doctors, and so on. It’s a positive reinforcement cycle.

They Help Patients

Value-based care programs are also beneficial for patients since they directly result in a higher quality of care. These programs incentivize short turnarounds and only the basic tests and procedures required for patient health. Patients receive fewer unnecessary tests and procedures with these programs, saving them money through their health insurance and often resulting in better outcomes and faster recovery.

The savings are ultimately irrefutable. For example, value-based care models will often have patients be prescribed over-the-counter medications instead of hospital-administered medications or treatments. Using tools like OTC Finder, patients can locate effective and affordable OTC medicines to alleviate their symptoms or treat their conditions.

What savings come about because of this example? According to a recent study, every dollar spent on OTC medicines saves the US healthcare system about $7.20. Now those are results everyone should be impressed with!

Value-Based Care Models

Several value-based care models exist at this time, and more are being developed as time goes on.

Accountable Care Organizations

An accountable care organization (ACO) is a network of hospitals, physicians, and healthcare providers that focus on giving high-quality and coordinated care to Medicare beneficiaries. By coordinating and targeting medical care efforts, ACOs cut down on administrative bloat and help to ensure that patients get the right care they need at the right time.

Bundled Payments

A bundled payment value-based care system (also called episode-based payment) relies on single payment models. Basically, patients are billed once for all of the services provided for a distinct episode of care. Then providers can be reimbursed for the expected costs to treat the condition.

If they treat the condition without all of the expected costs? They save money and the patient goes home happier.

Patient-Centered Medical Homes

Lastly, patient-centered medical home (PCMH) programs focus on delivering care by coordinating healthcare efforts from multiple sources through a single, primary healthcare physician. Patients can develop in-depth relationships with their primary healthcare providers and receive only the care they need based on long-term opinions from that physician.

This model has already seen some fantastic results. For instance, a PCMH based in Colorado found a 15% decrease in emergency department visits across the board.


Ultimately, it’s clear that value-based care programs and reimbursement initiatives are the way forward for the US healthcare system. Using smart, efficient programs like these, along with intuitive tools like OTC Finder, patients will enjoy better health care, rapid treatment, and bigger savings. Meanwhile, providers will also save money overall.