5 Reasons to Invest in Value-Based Care 

Patients and clinicians benefit from value-based care by reducing unnecessary healthcare costs. Healthcare suppliers also find value-based care appealing, as they can align their prices with patient outcomes and lower costs.

To date, primary care has shifted to value-based care (VBC), with several successful models leveraging incentives that may include one-sided and even two-sided risk and capitated arrangements. But there’s plenty of headroom for growth as other specialties adopt VBC models.

Better Patient Outcomes

Patient outcomes are becoming more critical with the healthcare industry shifting away from the old fee-for-service model and toward value-based care. Value-based care promotes quality care over quantity of services, improves population health management strategies, and reduces healthcare costs. This means that with this shift, patients will see an overall increase in the quality of their care and lower medical bills.

The main goal of value-based care is to reduce the number of ineffective or unnecessary medical treatments provided. The U.S. healthcare system currently produces some of the world’s best medical results but spends too much on useless or unnecessary care. Value-based care can decrease these ineffective or unnecessary treatments and improve overall patient satisfaction, safety, and outcome.

Often, primary care providers (PCPs) are the driving force behind value-based care. They are critical in patient screening, chronic disease management, and navigation to other specialists. Value-based care models align financial incentives with these physicians’ core mission, allowing them to practice what brought them into medicine in the first place.

The path to value creation will likely require a combination of analytics, standardized clinical practices, and operational workflows that can streamline and manage patient interactions across the care continuum. However, it will also require patience and a willingness to take risks to generate meaningful savings.

Reduced Medical Errors

Medical errors, ranging from misheard orders in the hallways of a busy emergency department to misidentification of a patient, cause about 1 in 10 deaths and cost the country $20 billion a year. These mistakes can be caused by various factors, from poor communication among care team members to overwork and fatigue. Ultimately, they can be reduced by emphasizing preventive healthcare and a holistic treatment approach.

The move to value-based care using the software for value based care addresses these problems by incentivizing doctors and hospitals on patient outcomes, safety, and equity rather than individual tests or procedures. These changes are helping reduce the number of medical errors and, in turn, improving patient satisfaction and outcomes.

In addition, the shift to value-based care has increased the likelihood that providers will be able to deliver quality healthcare at a lower cost. For example, many Medicare Shared Savings programs now pay physicians, hospitals, and other providers if they can cut costs while meeting specific performance metrics. This incentive structure is a big part of the promising movement to value-based care.

Investors looking to take advantage of these opportunities should focus on models with a clear clinical pathway to impact patient health and the ability to track and analyze data. They should also have the patience to see results; it takes time for risk-based arrangements to be profitable.

Increased Job Satisfaction

As value-based care transforms the healthcare system, it will also change the work environment. This means more patient-centered interactions and a focus on quality, which may lead to better job satisfaction for physicians. In addition to being suitable for patients, this can help reduce physician burnout and improve overall job performance.

Physicians must be equipped with the right tools to thrive in the new world of value-based care. These include interoperable EHR systems, allowing them to track and report on critical metrics. They will also need to be trained in using these new tools effectively, which will take time and resources. However, the payoff could be substantial.

Incentives like the HITECH Act have helped to spur value-based care adoption, but there are still many challenges ahead. For example, it will be essential to determine the best models and ways to measure value meaningfully and credibly to clinicians, health systems, and payers.

Additionally, it will be essential to develop nonfinancial incentives that are as effective as financial ones in promoting participation in value-based care programs. Ultimately, this will be the key to success in the new world of value-based care and creating a focused system that improves outcomes while decreasing costs. By doing so, the entire healthcare industry will benefit.

Reduced Healthcare Spending

In addition to patient outcomes and clinician satisfaction, another benefit of value-based care is reduced healthcare spending. This is because, in contrast to traditional fee-for-service models, value-based care rewards physicians and hospitals for achieving desired results rather than simply delivering services. In this way, patients are more likely to receive the right care and only the right services—which in turn leads to lower medical costs.

Value-based care also reduces the need for costly treatments, such as hospitalizations and medical emergencies. Additionally, because disease progression (which drives the need for continued care) is less likely to occur, overall costs also decrease.

Overall, value-based care has the potential to significantly improve health outcomes while reducing costs for patients, providers, insurers, suppliers, and society as a whole. It is a path to the Institute for Healthcare Improvement’s aspirational “triple aim” of improving the patient experience, enhancing population health, and reducing per-capita costs.

Investors may find value-based care a compelling investment opportunity. Private capital inflows to companies specializing in this space have grown fourfold over the past two years, while new construction investment has remained flat.

Those providers that can realize material cost savings by offering innovative clinical pathways and advanced analytics should have strong growth potential. However, investors must scrutinize these groups’ operational sophistication, as they must effectively manage cost curves and demonstrate clear and consistent financial performance.