top of page

The Pros and Cons of Value-Based Care

Value-based care is quickly becoming a game-changing reality in the healthcare industry. Many believe that this new model of patient centered, preventative care— instead of simply treating illness on a fee-for-service basis— is more effective and efficient for the long term benefit of both patients and providers.

While many laud value-based care as a revolutionary improvement in quality, cost, and outcomes in the healthcare industry, there are challenges associated with implementation and adoption which must be addressed by stakeholders. In this blog post we will take an in depth look at both the benefits and problems associated with value-based care.

In the CareTalk episode, "Why Value-Based Care Will Succeed", hosts John Driscoll and David Williams are joined by Clarify Health CEO, Jean Drouin, break down value-based care by weighing its opportunities and complications.

Value-Based Care vs Fee For Service

In the current healthcare landscape, value-based care and fee for service offer two distinct approaches to patient care. While value-based care is aligned with quality-of-care objectives, promoting positive outcomes for patients and cost savings for payers, fee for service centers around providing services in exchange for payment.

Fee for service is traditionally the means of payment associated with physician services and has been used for many years. It is rooted in the idea of providing direct value to physicians based on their time, expertise and effort. However, value-based care is becoming increasingly popular as an alternate option.

Models such as value-based care shift away from relying solely on measures such as fee for service to focus more heavily on improving the overall quality of patient care. With value-based care models, there are incentives for both providers and healthcare systems to work together toward delivering higher quality of care at a lower cost.

Given the need to balance high-quality patient outcomes with financial value, it's essential to understand both options in order to make informed decisions about healthcare delivery. It's critical that value-based models continue to be refined in order to ensure demonstrable improvements in overall quality of care while fee-for-service remains an essential factor when assessing system performance and cost efficiency.

Why Are Retailers Getting Into Value-Based Care?

A shifts toward value-based care requires a shift in focus to value over volume. Big retailers are taking notice and making moves to capitalize on this switch. With value-based care, providers focus on quality and outcomes to reduce costs while improving patient health. This model aligns the goals of providers, insurers, and patients so they can all reap the rewards of successful collaboration.

Big retailers have the potential to provide value-based offerings under in their retail stores by utilizing their vast resources and technology capabilities as well as their understanding of consumer preferences, needs, and value. By investing in value-based care, big retailers aim to take a more active role in transitioning from traditional fee-for-service methods used over the last several decades — towards value-based methods that better serve a customer’s needs and improve health outcomes.

"There's a really interesting opportunity for retailers to say, ‘If I can deliver. at a superior level, from a patient experience point of view, and stitch together an easier way to consume the resources they need to get the journeys they need - that's potentially a really interesting thing.” -Jean (CareTalk)

Exploring the Benefits of Value-Based Care

When it comes to the value-based care model there are a number of benefits. First, it encourages healthcare providers to prioritize quality over quantity – something that's essential in today's world where medical advances are happening at an astonishing rate and where doctors have access to more information than ever before. By focusing on outcomes rather than services, value-based care allows providers to make decisions based on what's best for their patients rather than simply trying to maximize their profits or reduce costs.

In addition, value-based care has the potential to reduce financial waste in the healthcare industry. It does this by tying payments directly to outcomes – if a provider achieves a certain outcome, they will be rewarded with higher reimbursements from insurance companies and other payers; if they fail to achieve that outcome, they will receive less reimbursement or no reimbursement at all. This creates an incentive for providers to do whatever is necessary to ensure that their patients get the best possible outcome from their treatment and avoid unnecessary tests and procedures that may not be medically necessary but only increase costs.

Finally, value-based care has the potential to improve patient safety by encouraging providers to focus on preventative measures such as lifestyle modifications and vaccinations instead of relying solely on reactive treatments such as medication or surgery.

Preventative measures can help keep people healthy and out of the hospital, which can drastically reduce overall healthcare costs while also improving patient satisfaction since they don't have to endure long hospital stays or multiple treatments for illnesses or injuries that could have been avoided altogether.

“There's been a thought from a policy point of view over the last 20 or 25 years that somehow we have to figure out a way to 'pay for value,' which effectively means, trying to achieve some notion of what's known as the quadruple aim: Better outcomes, efficient cost, good patient experience and that clinicians also have decent work experience in delivering the care". - Jean (CareTalk)

The Challenges of Value-Based Care

On one hand, value-based care focuses on providing better quality of care and greater value for the money spent on treating patients. On the other hand, it also brings practical challenges related to implementation.

For example, value-based care can cause providers to feel rushed when caring for patients due to increased incentives for each value-based service provided and the need to account for value or value-added services across multiple payers. Additionally, value-based payments are often based on a limited set of clinical measures, creating a potential for providers to focus more on addressing those metrics instead of providing comprehensive care that addresses patients' individual needs.

Finally, value-based models require data from electronic health records; however, there may be complications with the accuracy or availability of information due to uninformed or delayed investments in infrastructure such as interoperability or analytics capabilities. As such, these issues should be addressed if value-based care models are going to fulfill their promise of transforming healthcare delivery.

"Value-based care is a great idea. At least in theory, it's cheaper and it's better than fee for service, but the uptake is low because incentives are hard to align. Available data and analytics are not up to the task. It also takes too long for providers to be rewarded, and payers and providers just don't trust one another". - David (CareTalk)

Can Value-Based Care Take Over as the Primary Standard of Healthcare?

Ultimately, the type of care delivery chosen for a particular healthcare situation is determined by its unique needs. Both value-based care and fee for service models have their strengths and weaknesses. While value-based care can minimize cost, it has its difficulties related to insurance provider incentives that could lead to poorer service or even less effective treatment at certain times.

However, if properly implemented and managed, value-based care plans can result in better patient care such as prevention strategies to reduce exacerbations of chronic conditions. In addition, they could also lead to improvements in quality assurance measures as well as increased doctor training and educational opportunities.

In the end, healthcare systems will have to ascertain which model is best suited for their particular requirements. No matter what the decision may be, it is important that when developing a plan or program for patient care that the health outcomes of patients always be taken into account first and foremost.



CareTalk is the only healthcare podcast that tells it like it is. Join hosts John Driscoll (President U.S. Healthcare and EVP, Walgreens Boots Alliance) and David Williams (President, Health Business Group) as they provide an incisive, no B.S. view of the US healthcare industry.



bottom of page