By Rajiv Mahale

A 2022 report from The Commonwealth Fund highlighted the poor outcomes Americans experience in healthcare, especially when compared to similarly developed nations. Adults in the U.S. experience higher mortality rates overall, often as a result of chronic diseases. The healthcare system has long operated on fee-for-service payments, which prioritize the volume of care patients get over the quality of care and eventual outcomes. When there is little or no incentive to improve outcomes, it creates a perverse system that reinforces the wrong behaviors.

Fortunately, the healthcare system is moving toward a value-based care (VBC) future that shifts our focus toward care quality and patient outcomes while also doing what we can to control costs. This approach also prioritizes overall health management, particularly for costly chronic diseases, and promotes early interventions that reduce acute events.

VBC aligns healthcare providers' incentives with the well-being of their patients, fostering a stronger focus on preventive measures, personalized treatment plans, and continuous monitoring. It emphasizes value over volume and encourages medical professionals to collaborate across specialties, reduce redundant procedures, and minimize medical errors. Ultimately, VBC empowers individuals to actively participate in their health journey while promoting a more efficient and effective healthcare system.

For payers, providers, and self-funded employers who will benefit most from this shift, successfully implementing VBC requires sophisticated technology. Software must identify and mitigate risks, surface critical data trends before they hit clinical and financial bottom lines and prescribe specific actions healthcare stakeholders can take to improve care based on the insights available.

Leveraging technology to create lasting value
State-of-the-art technologies such as artificial intelligence (AI), machine learning (ML), and analytics serve as a primary data source for VBC organizations. They have the power to transform how healthcare professionals approach patient treatment to push quality to the forefront. For healthcare delivery organizations (HDOs) participating in alternative payment and care delivery models, the key is finding the right technology and leveraging it appropriately to achieve quality, cost, and patient satisfaction goals inherent in VBC.

Early intervention leads to better outcomes
For decades, patients and providers have operated mostly in a “sick care” system, where people engage with providers and facilities only after they experience adverse health events. That happened for many reasons, but the primary one is the incentive structure. When payments are structured as fee-for-service, there is little incentive for providers to encourage earlier intervention and preventive care because such measures reduce patient transaction volume.

As VBC takes root, HDOs and providers are increasingly embracing VBC's capacity to assess patient health holistically, proactively identify potential health risks, and intervene before health issues become critical problems that require emergency or hospital care. Predictive analytics can help providers find this information faster and easier. Analytics tools designed to predict risk can identify trends, flag deviations, and anticipate potential health complications down to the individual patient level. These software tools can then create cohorts with patients for whom intervention could minimize complications or prevent diseases entirely. Providers and care teams can then develop strategies, such as regular check-ups and disease management, to address issues before they snowball into acute care events. Eliminating the need for an ER visit or a hospital admission significantly lowers costs and translates to better outcomes for most patients.

Disease prediction and mitigation
AI prediction models can pinpoint undiagnosed cases and inaccurately coded records for the leading causes of death in America – diabetes and heart disease. This predictive capability provides another tool for providers to engage with patients flagged as high-risk.

For example, AI algorithms can comb through historical data to look for indications that a person has or will develop a chronic condition like diabetes or coronary artery disease. The model assigns a risk score from 0 to 100, flagging those surpassing a score of 50 as "likely" to develop the condition within the next 12 months. It can also flag patients who may already have a chronic condition, but it is not properly coded in their health record, which could negatively impact their future care.

Physicians can use the information alongside other data they have about a patient – such as family history and lifestyle behaviors – to recommend additional care or lifestyle changes that can mitigate the risk of disease, increase surveillance, or take other action to improve health.

Reducing acute events is a win for everyone
Acute health events that send a person to an emergency room or result in hospital stays are extremely costly, and often lead to disjointed care and worse health outcomes. By embracing technology-driven early interventions, the healthcare industry can transition from responding to health crises to preventing them whenever possible. The focus shifts from treating diseases to managing health, resulting in fewer ER visits and hospital admissions, and a healthier population.

Collaboration and engagement are keys to quality and cost control
One of the hallmark features of VBC is its emphasis on a collaborative partnership between healthcare providers and patients. This partnership is enriched with the data-driven insights technology provides. Providers can offer health recommendations based on near-real-time data and clinical decision support tools and optimize resource utilization for overall wellness. Patients then have more confidence in the quality of their care and can take ownership of their role in a healthier future.

The future of value-based care
VBC adoption is escalating, currently generating around $500 billion in enterprise value, with the potential to reach $1 trillion as this approach to care continues to mature. The promise of VBC is amplified through the convergence with advancing technology, marking a pivotal juncture in healthcare. By leveraging the power of technology to predict, prevent, and provide, VBC is setting a new standard for healthcare in America.

About the author: Raj Mahale is the chief product and business development officer at Cedar Gate Technologies. He has 18 years of experience leading and growing healthcare companies, and has worked for multiple leading healthcare organizations in various roles.