Value-Based Health Care 101

Healthcare delivery and reimbursement are changing. The traditional model of care delivery, known as “fee-for- service”, involves the payer (government or private insurance company) reimbursing the provider (doctor’s office, hospital) based on the number of treatments performed.

Value-Based Care Model

The new way, the Value-Based Care model, is designed to improve outcomes for the patient (so he or she does not have to come back after surgery) by increasing provider efficiency and effectiveness and better engaging the patient throughout the episode of care.

Providers are now penalized for patient readmissions (if, for example, your hip replacement surgery leads to post-surgical complications and you have to return to the hospital).

Creating an Effective Value-Based Environment

The Value-Based model is driving physicians and hospitals to champion a patient-centered approach. Ideally, the patient comes in for a successful surgery, spends as little time in the hospital as possible to ensure a positive outcome, and has a safe and speedy recovery at home.

At a recent orthopedic meeting in Orlando, Dr. Richard Iorio spoke on the Value-Based Care model.

Creating an effective Value-Based environment within a hospital, he said, requires:

  1. Transparent data on outcomes and physician behavior

  2. Physician alignment with hospital leadership

  3. Standardized protocols amongst clinicians for the entire episode of care

“Optimizing patient expectations and outcomes by maximizing care management and patient education is a key to successful adoption of value based care and alternative payment models.

Transparent data, hospital-physician alignment, physician champions, and gain sharing are critical to maintaining that success,” Dr.Iorio explained.

Also in attendance was Dr. Joseph Bosco, who added,

“If you can decrease costs and have the same outcomes, that’s good. If you can decrease costs and improve outcomes, that’s better.”

The healthcare landscape is evolving. Groups that can innovate effectively without compromising quality of care will be the leaders.


Gerhardt W, Korenda L, Morris D, Vadnerkar G. The road to value-based care. Deloitte University Press. 2015.

"What Is Value-Based Care?" Creating a Sustainable Health System. Dartmouth-Hitchcock, n.d. Web. 11 Mar. 2016.