Moving from Volume-based to Value-based Reimbursement

Health Information Services Practice Management Revenue Cycle Management

Patient_Satisfaction 5 initial Steps to improve operations and increase patient satisfaction.

The shift from a volume based reimbursement format to value based one is taking shape across the country.  Healthcare providers are being urged to move from payments based on quantity of services provided to payments based on the values of these services.

Quality and value are two terms that are not always well understood or differentiated.  Quality is generally thought of as a state of excellence and freedom from defects. It is rather subjective based on who is doing the assessment.  Value is often a relative assessment based on the monetary worth of an item.  In relation to quality, value can be seen as achieving a state of excellence (quality) in a cost effective manner.  In healthcare then, value represents increased excellence of service (quality of care) at a lower cost.  This is a dual challenge that healthcare professionals and facilities must meet.

5 initial steps in preparation for value-based reimbursement: Increase patient satisfaction and improve operations:

The journey from volume-based to value-based reimbursement is not an easy one.  Providers need to identify new ways of interacting with patients and with each other, and must also find ways of eliminating waste in order to make the transition in an economically satisfactory manner.

The following is a simplified 5-step journey from volume-based to value-based payment.

Step 1. Improve communications with your patients

Failure to clearly communicate a care plan with the patient has been blamed for a large portion of patient readmissions.  It’s been observed that patients are coming back or calling the provider to inquire about simple things such as follow-up care – something that could be communicated much earlier if there was a concrete care plan. 

Patients need to be informed as to what to expect after discharge.  This is a successful strategy to minimize costs associated with readmission.

Step 2. After discharge, give your patients a follow up call

A good way to communicate post-discharge care is to give the patient a call within 24-48 hours of discharge. This can help prevent readmissions and save related costs.  It also creates a closer connection between you and your patient. In the future, this patient will be happy to recommend your services to family and friends. You are also likely to capture medical issues quicker. 

Step 3. Help your patients in making better decisions.

Medical care cannot be treated as the be-all end-all of health care.  Indeed, a 2002 report discovered that medical care contributes just about 10 percent to longevity compared to 40 percent for behavioral patterns.

What this means is that care providers need to be thinking outside the medical care box and into other areas such as exercises, tobacco use, food, and other factors that directly affect a patient’s well being. 

Step 4. Alongside day-to-day needs, consider long-term business implications

Healthcare is extremely complex and often providers find themselves pre-occupied with immediate needs at the expense of long-term business needs.  You may find yourself so focused on day-to-day budgets and month-to-month activities to the point of forgetting to look at the overall cost structure that is present today and may be present in the years to come.

For example, you can consider using mid-level practitioners to help you provide better service to your patients. Ie.  Using a PA for follow up visits,  communicating the care plan and in discharging your patients.

Step 5. Eliminate non-value-added practices

Finally, providers must do all they can to eliminate all non-value-adding practices.  If reports from Dartmouth Institute for Health Policy and Clinical Practice are to be believed, then at least 40% of medical services provided in the country are NOT value-adding. 24% of defensive tests carried out by orthopedics are not of significant benefit to the patients and 35% of specialist referrals by these surgeons are motivated by defensive medicine. Orthopedic surgeons are advised to remove these unhelpful processes if they’re to move from volume based to value based services while not exposing themselves to litigation liabilities. That latter issue of litigation and liability is another issue in its entirety, one that is screaming for meaningful change in a myriad of arenas from medial liability laws to tort reform.


It’s not an easy process. Sacrifices and changes will have to be made along the way.  But the accrued benefits should be well worth the efforts.

Feel free to contact Healthcare Information Services (HIS) for guidance in this journey and for help with revenue cycle management solutions.