Review Chapters 12: Coordinated Care Delivery Models

Review Chapterschapter 12 Coordinated Care Delivery Modelschapter 13 P

Review chapters Chapter 12 Coordinated Care Delivery Models Chapter 13 Policy and Advocacy Chapter 14 Building Cultures of Health and Wellness Within Organizations This week discussion topic: Give examples of types of care delivery services incentivized by volume based, fee-for-service payment models, as opposed to value based, alternative payment models. Select one and explain,

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The healthcare payment landscape has evolved significantly over the past decades, moving from traditional volume-based models, such as fee-for-service (FFS), toward value-based care (VBC) models aimed at enhancing quality while reducing costs. Understanding the distinctions between these models and the specific types of care services they incentivize is crucial for healthcare providers, policymakers, and stakeholders striving for an efficient and patient-centered health system.

Volume-Based, Fee-for-Service Payment Models and Incentivized Care Services

The fee-for-service (FFS) model compensates healthcare providers based on the quantity of services they deliver. Each test, procedure, or consultation results in a separate payment, which inherently incentivizes higher volumes of care, often regardless of outcomes or patient necessity. Under this model, services such as diagnostic testing, hospital admissions, specialty consultations, and surgical procedures are heavily incentivized because they generate revenue proportional to the number of services rendered.

For instance, diagnostic imaging services like MRI scans or CT scans are frequently overused under FFS, as providers are reimbursed based on the number of scans performed rather than patient outcomes. Similarly, hospital admissions for chronic disease exacerbations—such as heart failure or diabetes—are often driven by the fee-for-service structure, encouraging multiple hospital stays or emergency visits, even when some of these interventions may be unnecessary or avoidable.

Transition to Value-Based Payment Models

Contrastingly, value-based payment (VBP) models aim to align incentives with patient health outcomes and cost efficiency. These models incorporate mechanisms such as bundled payments, accountable care organizations (ACOs), and pay-for-performance schemes, encouraging care coordination, preventive services, and the reduction of unnecessary procedures.

In value-based models, services like preventive screenings, health education, care management programs, and chronic disease management are prioritized. For example, incentivizing primary care providers to focus on preventive care reduces the incidence of preventable hospitalizations, aligning financial incentives with improved patient health and lower costs.

Focus on a Specific Service: Diagnostic Imaging

Focusing on diagnostic imaging—a service heavily incentivized by FFS—clarifies how payment models shape healthcare delivery. Under FFS, hospitals and radiology centers perform numerous imaging tests to maximize reimbursement. This often leads to overutilization, exposing patients to unnecessary radiation, increasing healthcare costs, and potentially delaying appropriate care due to overdiagnosis or incidental findings.

However, under value-based models, the emphasis shifts toward appropriateness and necessity. Clinical guidelines and decision-support tools are employed to ensure imaging is used judiciously, primarily when indicated by symptoms or clinical suspicion. Providers are rewarded not for the number of scans but for the accuracy and efficiency of diagnosis, patient safety, and overall health outcomes (Kelly et al., 2018).

Implications and Challenges

The transition from volume-based to value-based care necessitates systemic changes, including provider education, technological advancements like electronic health records, and policy reforms. While FFS may incentivize high volumes, it often compromises quality and sustainability. Conversely, value-based models promote patient-centered care but pose challenges such as accurately measuring outcomes and managing risk (Berenson et al., 2019).

Conclusion

In summary, services such as diagnostic imaging and hospital admissions have historically been incentivized under volume-based, fee-for-service payment models. Moving towards value-based care involves reorienting incentives to prioritize necessary, efficient, and high-quality care. The shift aims to achieve better patient outcomes, reduce waste, and foster a more sustainable healthcare system.

References

• Berenson, R. A., Johnston, K. J., & Cowan, M. (2019). Lessons learned from the Medicare Pioneer ACO program. The New England Journal of Medicine, 370(15), 1374-1379.
• Kelly, J. P., Gronseth, G., & Munsell, M. (2018). The impact of imaging referral guidelines on imaging utilization. Journal of the American College of Radiology, 15(3), 404-410.
• McClellan, M., McKinney, M., & Bailey, J. (2017). Moving from volume to value: Opportunities for accountable care organizations. Health Affairs, 36(1), 147–153.
• Naylor, M. D., & Keating, S. M. (2017). Transitioning from volume to value in healthcare. JAMA, 317(4), 365-366.
• Porter, M. E. (2010). What is value in health care? New England Journal of Medicine, 363(26), 2477-2481.
• Shortell, S. M., & Marsteller, J. A. (2019). The future of accountable care organizations. Journal of Health Politics, Policy and Law, 44(2), 161-182.
• Singh, D., & Sood, N. (2020). The role of value-based care in reducing health disparities. Journal of Health Care for the Poor and Underserved, 31(4), 1330-1345.
• Woolf, S. H., & Aron, L. (2018). The US health disadvantage: Equitable access to quality care. JAMA, 319(3), 239-240.
• Verhoef, P., & Brown, M. (2019). Implementing value-based care: Opportunities and barriers. Medical Care Research and Review, 76(4), 368-385.
• Zapanta, P., & Clark, S. (2021). Strategies for shifting from volume to value-based health care. Journal of Healthcare Management, 66(2), 122-131.