Practice Management

Cost-Savings Opportunities in Value-Based Care

Achieve success—and save money—in the new value-based environment

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stethoscope on money

The urgent need to decrease costs and improve care in the US health care system is leading more health systems and physicians to adopt a value-based approach. This care model reflects the idea that physicians should be held accountable for the care they provide in terms of outcome, quality, and cost, explains Dev Sangvai, MD, the associate chief medical officer for Duke University Health System. “How do you ensure that care is delivered in an efficient manner and that it’s appropriate, backed by evidence, and cost-effective?”

Evidence shows that engaging in value-based care can improve patient outcomes, satisfaction, and engagement while also decreasing costs to patients and providers. Integrated systems with effective electronic health records (EHRs) can reap the greatest benefits.

“If you’re able to share and see lab results between hospitals and different practices with an EHR, you’re going to decrease duplication of care, decrease costs, and improve your performance,” explains Robert Nesse, MD, a family doctor, senior director of policy and payment reform for the Mayo Clinic, and chair of the High Value Healthcare Collaborative board.

To achieve success (and save money) in the new value-based environment, Nesse says that medical groups should have 5 prerequisites in place:

  1. A network of providers who are responsible for a patient’s care over time, which should include hospitals, physicians, and post–acute care providers.
  2. An aligned purpose, such as agreeing upon a total cost of care for up to 90 days for select diagnoses. The network of providers can designate approaches for decreasing the cost of care while maintaining good outcomes.
  3. A coordinated care plan with integrated services that prevents hospital readmissions and improves care. “That will save big money,” Nesse says. For example, coordinated care between hospitals and subacute nursing facilities can shorten nursing facility stays.
  4. Timely, actionable analytics. “If doctors want to preserve outcomes and decrease costs, they must have a global view of cost and understand every segment of that cost in great detail or they can’t manage it,” Nesse explains.
  5. An aligned payment model among all providers.

“For me, saving the patient money, improving outcomes, and decreasing the costs is kind of why [physicians] go to work in the morning,” Nesse says. “We’ve got to start doing this right now because the cost of care is not sustainable.”

Sangvai acknowledges that it can be daunting to think about preparing for a new care model while simultaneously focusing on delivering good care. “My advice is to be active, pay attention, and take the right amount of risk,” he says.