What Actually Changes When Organizations Shift to Value-Based Care?

Hospitals and medical groups traditionally bill insurance for every visit and procedure. Value-Based Care pays based on patient outcomes and overall costs instead. Organizations sign contracts that put them at financial risk if their patients need expensive care. They also earn bonuses when they improve health outcomes while spending less. This shift demands different technology, workflows, and staff than most healthcare organizations currently have.

Payments Depend on Quality Metrics

Value-Based Care contracts pay providers based on their quality scores and total spending. A hospital gets bonuses when diabetic patients maintain good A1C levels. That same hospital loses money if too many patients get readmitted within 30 days.

Medicare ACOs that met quality targets earned bonuses averaging $67 million in recent years. Groups that exceed spending benchmarks or miss quality goals see reduced payments even when they treat more patients.

Common Payment Models

• Shared savings, where organizations keep a portion of the cost reductions
• Capitation payments that give providers a set amount per patient, monthly
• Bundled payments covering all services for procedures like hip replacement
• Quality bonuses added to base payments

Care Teams Reach Out Before Problems Happen

Doctors' offices used to wait for sick patients to call for appointments. Now, care teams contact patients before health issues get worse. Staff call diabetics when their blood sugar trends upward. They schedule cancer screenings before patients miss their eligibility window.

McLaren Health saved $34 million by stopping hospitalizations before they happened. Their teams found high-risk patients and helped them early instead of treating them in emergency rooms later.

Organizations Need Much More Patient Data

Traditional practices track billing codes and schedules. Value-based care needs claims records, lab results, pharmacy data, and information about patients' living situations.

Health systems need software that pulls data from different EHRs, health information exchanges, and insurance companies. Prime Healthcare gathers information from thousands of places to find missed screenings and monitor quality across all their patients.

Hospitals Hire Different Types of Staff

Traditional hospitals employ doctors, nurses, and billing staff. A Value-Based Care Solution needs care managers, data analysts, quality specialists, and population health coordinators.

Care managers contact patients and help them manage chronic diseases. Analysts watch quality numbers and costs. These positions cost money upfront before the organization sees any savings from value-based contracts.

New Team Members

• Care coordinators who manage chronic disease patients
• Population health nurses focused on preventive services
• Data analysts tracking quality and cost metrics
• Social workers addressing non-medical barriers to health

Technology Infrastructure Needs A Complete Overhaul

EHR systems designed for fee-for-service billing lack population health management capabilities. Organizations invest in Value-Based Care Solutions that stratify patient risk, identify care gaps, and measure outcomes across thousands of patients.

Implementation timelines vary widely. Some organizations spend 12-18 months deploying new systems. Others complete installations in 8-10 weeks, depending on vendor capabilities and organizational readiness.

Financial Risk Transfers to Providers

Fee-for-service healthcare carries minimal financial risk. Providers bill for services and collect payments regardless of patient outcomes. Value-based contracts make organizations responsible for their patients' total healthcare costs.

An ACO managing 10,000 Medicare beneficiaries faces potential losses if those patients' combined medical expenses exceed benchmarks. This risk exposure requires reserves, insurance products, and financial management expertise that most healthcare organizations developed for fee-for-service operations.

About Persivia

Persivia supports healthcare organizations through value-based care transitions with technoloy developed over 20 years in population health management. Health systems using Persivia's platforms manage over 160 million patient records while connecting to thousands of data sources. Organizations report measurable improvements in quality scores and cost performance after deployment. The company's implementation approach completes system setup in weeks rather than months, allowing care teams to start managing populations quickly.