Wave of the Future: Value-Based Care

September 20, 2018

The practice of insurers paying fee for services to physicians and hospitals is going the way of the dinosaurs. Look for value-based care to replace the current payment model.

With the fee for service approach, insurers pay medical providers based on the amount of health care services they deliver. With value-based care, insurers pay providers to improve patients’ health. Physicians work with patients on an ongoing basis which reduces the effects and incidence of chronic disease and keeps them healthy.

Most major insurance carriers and government health agencies are moving toward a value-based care system. Aetna expects that 75 percent of their medical payments will be for value-based care by 2020. The U.S. Department of Health and Human Services also is dedicated to the concept and has plans to move 50 percent of traditional Medicare payments to value based payment models between now and 2019.

The goal of value-based care is to improve the quality of care and reduce health care costs across the board by coordinating efforts between different health providers. According to the United Nations World Health Organization, life expectancy in the United States is lower than 30 other countries. Insurers and providers hope that the value-based care approach will improve that situation.

The benefit of value-based care is that these models focus on helping patients recover from illnesses and injuries more quickly and help clients avoid chronic disease. As a result, patients have fewer doctor’s visits, medical tests and procedures.

There also are challenges with this concept. It’s been more difficult for providers to transition to this model than was expected because providers still must focus on patient care while continuing to focus on improving patient care. Also, the volume of electronic health records and other information that must be shared requires coordination and more time.

The information provided in this alert is not, is not intended to be, and shall not be construed to be, either the provision of legal advice or an offer to provide legal services, nor does it necessarily reflect the opinions of the firm, our lawyers or our clients. This is not legal advice. No client-lawyer relationship between you and our lawyers is or may be created by your use of this information. Rather, the content is intended as a general overview of the subject matter covered. Barrow Weatherhead Lent LLP is not obligated to provide updates on the information presented herein. Those reading this alert are encouraged to seek direct counsel on legal questions. © 2023 Barrow Weatherhead Lent LLP. All Rights Reserved.

About Alera Group 

Alera Group is an independent, national insurance and wealth services firm with more than $1.1 billion in annual revenue, offering comprehensive employee benefits, property and casualty insurance, retirement plan services and wealth services solutions to clients nationwide. By working collaboratively across specialties and geographies, Alera Group’s team of more than 4,000 professionals in more than 180 locations provides creative, competitive services that help ensure a client’s business and personal success. For more information, visit https://aleragroup.com/ or follow us on LinkedIn.