There are various factors that are behind the revolution being seen in healthcare and these factors range from the enactment of certain laws, increased consumerism and the involvement of technology firms in healthcare which all now affect how healthcare will be delivered. Such forces have raised the level of awareness, attracted huge investments, continue to drive innovations in the healthcare industry.
By making use of the value based pricing model the financial risks move from the payers to the other stakeholders like providers in ACOs (Accountable Care Organizations), MNOs (Managed Care Organizations) and IDNs (Integrated Delivery Networks) and also to consumers. The truth is that at the end of the day it is healthcare providers that are responsible for improving the health of clients or risk facing financial repercussions.
It is good to note that by the year 2018, a certain regulatory body has mandated that it will be a requirement that half of all payments will be value-based which means that the health providers will be paid for healthy outcomes as opposed to being paid as a fee for service (which is the predominant model) that is a model where providers are paid based on how many services have been given. As per a recent study most healthcare providers noted that value-based agreements make up only a tenth of their current mode of payment and this means that there is a lot of work that needs to be done.
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There are so many ways to bridge this gap but most of the people in that study believed that the effort must come from the consumers whereby they need to take control of their health under the new health based model. Most people are becoming empowered and knowledgeable in managing their health but there is some help needed to get there. One advantage is that there is a lot of common ground across various stakeholders on the need to improve the delivery of healthcare and this has had some impact.
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One of the effects of the value-based model is that it will optimize the use of resources since providers will move from a volume of care to an emphasis on quality of care and they will have to optimize their resources since they will be remunerated based on the health outcomes of their patient.
Most people feel that the current model, fee for service, does not create the right incentive to improve health and the move to a value based model will force some players that have been focused on reducing costs (by curtailing benefits) to move away from a transactional approach and adopt a focus on health outcomes with cost reductions being hinged on having healthier clients.