Transition to Value Based Healthcare

The next big change in the healthcare industry is the move to “Value Based Healthcare”.  Value Based Healthcare (VBH) is the delivery of evidence based treatments through which providers are compensated for the results in improved patient outcomes.  One of the critical success factors for VBH is financial viability and it requires a thorough understanding of this transition from the current “Fee for Service” (FFS) model.  This requires a thoughtful deliberate process, with target dates, times and a repeatable process.  Establishing gateway check points along the way with positively identified measures of success is essential. Provision appropriate, effective patient care will become a priority in a value based delivery model as well as provision of a responsible fiscal footing for the providers.  Understanding the “Quality over Cost over Time” paradigm, and the impact on patient health and satisfaction with care and costs is essential to successful value based healthcare implementation. It is also judicious to note that FFS will not entirely disappear and at least not for the foreseeable future. How the two divergent system coexist to provide the best patient care, while financially viable for providers is key.  Linking physician compensation to the financial wellbeing of your facility is a recommended approach.



The Financial Challenge:  This transition to VBH changes the method by which hospitals get paid.  One of the payment types that is starting to roll out by CMS is called bundled payments for episodes of care.  Beginning April 1, 2016 CMS is initiating a mandatory bundled payment initiative for primary total joints replacement in 67 markets.  Because this decision came so quickly it is anticipated that CMS will decide to expand or even require other bundled payment initiatives in the near future.


Vaco Healthcare’s Response:  A robust process to achieve success in a bundled payment environment by:


    1. Standardizing pre-operative patient preparation and education for a successful surgery: low cost testing and education to reduce patient complication post-surgery


    1. Streamlining processes: From pre-op to 90 days post discharge, create standard processes, protocols, and orders that help get the patient back to home and functional as soon as possible. This includes creating criteria for post-acute providers regarding high quality treatment and expectations outcomes.


    1. Using data to improve outcomes: create a metric driven system that expects all providers and suppliers to maintain the highest quality to drive excellent outcomes


  1. Tracking and reporting efficiencies and cost to maximize revenue: Offer reporting that tracks hospital/post-acute/and physician cost for the 90 day period as defined by CMS.

Zand, Peyman. Thurs. 8, Apr. 2016. “Transition to Value Based Healthcare.” LinkedIn. Retrieved from