The Connection Between Value-Based Healthcare Models and Interoperability in Healthcare

Today’s healthcare industry is more competitive than ever before. As hospitals look to recruit and hire the best doctors in the world, create comfortable patient experiences, and streamline processes for communicating with providers, it’s evident that the feelings a patient gets at a medical practice are an important part of their care. These feelings are what drive a patient to choose one practice over another when all else aligns.

In this competitive healthcare arena, providers need to set themselves apart from others by providing value to patients. One way to do this is by providing a value-based healthcare model for patients. What exactly is a VBHC, and how is it tied to interoperability in healthcare? The team at Iron Bridge is here to break it down for you.

What is Value-Based Healthcare?

Say Goodbye to the Inadequacy of a Fee-for-Service System

doctors with patients

In a traditional healthcare model, patients pay based on a fee-for-service model, which assigns a price per visit or procedure. This model pays providers and hospitals based on the number of services they deliver, which can lead to excess testing and treatments that continue to ring up a higher bill for patients, regardless of whether or not the treatments are effective.

Value-based healthcare (VBHC) models, on the contrary, reward providers based on patient outcomes. Using an alternative payment method (APM), physicians, providers, and hospitals are paid according to the overall health and outcomes that result from treatment.

There are four main goals that should be achieved within a VBHC model:

  • Improved Patient Care
  • Improved Population Health
  • Lower Healthcare Costs
  • Increased Provider Satisfaction

Payment is often determined based on a patient’s initial health status and the number of services required. Many providers assume an upside risk in which an initial contracted payment is determined. If the necessary care amounts to less than this amount, the provider and patient split the excess. However, if the total number of treatments exceeds the payment allocation, payers are not financially penalized. In other words, providers are incentivized to choose the right treatments rather than to raise the bill with unnecessary treatments.

Why VBHC is Tied to Interoperability in Healthcare

Using Interoperability in Healthcare to Reduce Costs & Improve Outcomes

doctor with a tab

At the end of the day, VBHC models look to create a healthier patient population while reducing costs and improving day-to-day care. Similarly, interoperability in healthcare creates a digital landscape that supports these initiatives.

Interoperability in healthcare helps integrate patient health information, test results, and more into one centralize place. This centralization of data is then accessible by all necessary parties—including patients, billing, labs, and others—in a secure manner.

Altogether, interoperability in healthcare helps create a web of people within the healthcare industry that are equipped with the data and tools for providing high-quality care and saving money on excess tests and treatments. This is exactly how many alternative payment methods (APM) in VBHC models aim to function. These models stress a team-oriented approach to care, sharing patient data, and coordinating care in a way that ensures that a positive patient outcome is achieved at the lowest possible cost.

There are more than 40 different APMs currently being used in value-based models. In order to demonstrate the tie between these models and interoperability in healthcare, here are two examples:

  • Accountable Care Organizations (ACO): ACOs are the first value-based models that were created with the passage of the Affordable Care Act in 2010. In an ACO, a group of providers coordinates care for a patient in the form of one informed network. In order to do this, interoperability in healthcare allows these providers to share test results like blood work and radiology images, communicate with one another, and coordinate a holistic care plan for the patient. The gathered data is also shared with the patient to enforce patient engagement and result in better success rates.
  • Patient-Centered Medical Homes (PCMH): Very similar to an ACO, a PCMH is a network of providers who are typically from a number of different hospitals and practices. They rely on the sharing of electronic medical records to coordinate care, making it extremely important to centralize data to reduce redundant treatment and the associated costs.

Altogether, it’s clear that value-based systems are extremely reliant on interoperability in healthcare to function. As more hospitals switch to a VBHC model, healthcare integration and data centralization are more important than ever.

However, a number of issues still exist in achieving complete interoperability which makes it expensive and complicated to implement. However, Iron Bridge offers Nuvola Hub: a managed data integration platform that makes it possible to provide a VBHC model to patients everywhere.

Want to know more about Nuvola Hub and how it promotes better outcomes using interoperability in healthcare? Get in touch with the team at Iron Bridge today to learn more.

Back to blog