The change from Fee for Service (FFS) to Value Based Care (VBC)

This week blog is dedicated to the recognition of the changing landscape of reimbursement model in the healthcare industry and the effects on health outcomes

Value-based care” (VBC) and “fee-for-service” (FFS) are terms used in the insurance industry and in Managed Care environment.

What does FFS and VBC mean:

Fee for Service (FFS) is a healthcare delivery model in which doctors and other health care providers are paid for each service performed, this includes tests and office visits. Value-based care” (VBC) on the other hand is a model in which providers are paid based on patient health outcomes. Here, providers are rewarded for helping patients improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.

Why is the change needed?

 Currently in 2021, FFS is the dominant delivery model but there is a glaring downside; providers are compensated for each procedure, test, treatment, etc. they perform, regardless of whether that procedure, test or treatment results in a better outcome for the patient. What this implies is providers are financially rewarded for quantity over quality; one can visualize that patient can sometimes undergo unnecessary tests or treatments when perhaps lower cost, and just-as-effective options are available

 VBC is seen as the long-term solution to the healthcare system’s cost and service inefficiencies. Here the rendering providers are not rewarded for the quantity of procedures performed, but rather for effectively managing the health of individuals and populations. Under the VBC providers participate in team-oriented approach to patient care, coordinating care across the medical arena (primary care -specialty-ancillary services) and working with a patient’s other care providers and just as important the patient, to deliver the best health outcomes possible. A patient centered approach to healthcare. There are some cons to the VBC model, namely:

  • Providers are oftentimes responsible for wellness issues that maybe beyond their scope.
  • The demands can lead to a tougher, less sustaining work environment for physicians.
  • Organizations that lack data managing skills find it difficult to reach value-based care objectives 

Having said this, the shift from a Fee-for-Service to a Value-Based Care is seen as pivotal if the IOM triple aim of medicine is to be achieved: Improve quality and patient satisfaction at a reduced cost

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