Quality Data Is Key To Value-Based Care Success

Healthcare’s transition to value-based care (VBC) exemplifies the saying that nothing worth having is ever easy.

The transition to VBC models has been gradual, even as U.S. healthcare spending reached $14,570 per capita in 2023 – easily the highest in the world – with little corresponding improvement in patient health outcomes.

Many health systems recognize the current fee-for-service care models are not working well for anyone (patients, providers and payers), yet they are stuck because many health systems still rely on highly specialized, high-margin, tertiary care services to make a margin. VBC on the other hand introduces financial uncertainty, workflow disruption and new performance risks, particularly when existing quality metrics used by insurers are seen as poor proxies for true improvements in patient outcomes.

To fully realize the vision of VBC, two things must occur: alignment between payers and providers on quality measurement, and provider adoption of technology that enables performance assessment and safer, higher-quality care.

Why change is hard for many providers and specialists

Traditional fee-for-service care models reward clinicians for the volume of care provided – more office visits, tests, individual procedures, treatments, consultations. These models have resulted in fragmented, unnecessary and excessive care, prioritizing quantity of care over quality.

The Affordable Care Act of 2010 accelerated the transition to VBC by shifting Medicare reimbursements to reward high value care that delivers better patient outcomes and cost efficiency.

Basically, everyone agrees with the concept in theory. In practice, many providers find value-based care decision making more complex, partly because they must balance patient outcomes, costs and patient satisfaction – often without clear, integrated data to guide them.

Take musculoskeletal (MSK) health as an example. Chronic MSK pain affects muscles, ligaments, joints, bones and nerves. Most MSK surgeries are elective and have high margins for hospitals: MSK-related care in the US accounts for over $300 billion in total spending annually.

Under fee-for-service models, decisions about whether to refer patients with chronic MSK pain to more aggressive interventions were more straightforward, especially if exercise and medication weren’t working. But VBC bundled payment models typically encourage MSK providers to take a balanced approach, trying lower-cost interventions before moving to surgery. Many MSK providers, however, would argue that a lower-cost intervention that only marginally improves a patient’s pain isn’t a better health outcome. At the same time, MSK providers may face negative patient ratings if they take this wait-and-see approach.

Compounding these challenges, many providers operate with fragmented patient safety and quality data systems, making it even harder to make fully informed, evidence-based decisions under VBC. Without clear visibility into outcomes and safety metrics across care settings, providers often struggle to reconcile the goals of cost-efficiency, high-quality care and patient satisfaction.

Rethinking quality measurements

Value-based care payments are determined by a range of metrics. These include clinical outcomes data (mortality rates, hospital-acquired infections), patient experience surveys, cost, preventive services (such as the rate of vaccinations and screenings) and patient-reported outcome measures (PROMs).

The challenge with many of these quality measurement tools is that they have not changed significantly in years. Even PROMs use functional metrics specific to their condition, such as severity of symptoms and physical function. Many of them don’t ask big-picture questions about the patient’s overall quality of life, whether their course of treatment is addressing their condition, and whether they feel like they have a voice in their treatment decision making.

Changing PROMs to be more patient-centered could give us more meaningful data that’s aligned with the goals of VBC. For example, a patient with chronic arthritis in their knee may report better function and less pain through medication, a knee brace and exercises, but are they actually living a better, more active life?

Measuring the effectiveness of preventative care and patient safety

Revamping quality measurements is a vital step but only tells part of the story. Fully-realized VBC relies on delivering preventative care at scale – things like more regular health screenings and vaccinations, routine checkups like annual physicals and wellness visits, counseling on diet and exercise, and measures that reduce patient harm like rigorous infection control, medication safety protocols and more structured team member communications.

Our existing quality measurements only scratch the surface. Hospitals need more insight into how they can restructure their operations so that they can deliver preventative care at scale. They need visibility into how, where and why safety, quality and system breakdowns occur in their operations so that they can take measures to correct those flaws.

This is where technology becomes critical. Today’s AI-powered tools allow hospitals to measure preventative care, understand risks and connect outcomes back to clinical decision making.

One way hospitals are rethinking how they visualize patient safety and risk is through how they capture and analyze harmful events. Historically, patient safety and risk management efforts relied on a retrospective capture of harmful events, which led to long delays between harmful events and preventative measures being taken.

Today, many hospitals are taking a more proactive approach. This includes implementing tools that automatically alert safety and risk management teams every time an adverse event is logged, so that they can take immediate steps to prevent harm. Hospitals are also using AI-based tools to streamline reporting: team members can narratively log incident details, and an AI tool will pre-populate an incident report, saving significant time and improving reporting accuracy. They are also using digital tools to standardize policies and streamline workflows to give decision makers more meaningful, actionable insights.

The healthcare system has a long way to go before it fully transitions to care models that prioritize patient outcomes and safety over volume of care. We all want healthier patients and greater financial stability for hospitals and health systems. Getting better alignment between payers and providers, reimagining how we measure patient outcomes and getting deeper, real-time insights into how well preventative care and patient safety are being delivered at scale will move us toward that objective.