Arpan Saxena is the COO/CIO at basys.ai (based out of Harvard University), a leading healthcare AI solutions company.
The healthcare industry is undergoing significant changes, with the shift toward value-based care (VBC) taking center stage. As the sector moves away from fee-for-service models, rising costs and evolving administrative models pose new challenges. However, policy reforms and interoperability standards are creating opportunities to improve patient outcomes, reduce costs and streamline administrative processes. Although the road to VBC has its hurdles, the ongoing changes have the potential to transform healthcare delivery and improve care for patients across the country.
The Challenges Of Value-Based Care
Value-based care incentivizes healthcare providers to deliver high-quality care by rewarding positive health outcomes, such as reduced hospital readmissions, rather than simply paying for the number of services rendered. This shift from volume to value encourages providers to deliver care more efficiently, lowering overall healthcare spending.
However, the transition to VBC isn’t without challenges. Many healthcare organizations are still tied to traditional fee-for-service models, and switching to VBC requires significant investments in new technologies, infrastructure and training. Providers must integrate new data-sharing systems and align their practices with reimbursement criteria to fully participate in VBC. Despite these hurdles, VBC offers a chance to reduce long-term healthcare costs while improving the quality of care provided to patients.
Policy Changes And CMS Reforms As Enablers
Policymakers have been pushing for reforms that promote VBC, with significant progress over the last decade. The Medicare Access and CHIP Reauthorization Act (MACRA) is a key reform that incentivizes healthcare providers to adopt VBC models. MACRA encourages providers to transition from fee-for-service to alternative payment models, such as the merit-based incentive payment system (MIPS) and advanced alternative payment models (AAPMs).
The Centers for Medicare & Medicaid Services (CMS) has also played a pivotal role in reforming prior authorization (PA) processes to reduce administrative burdens for providers. CMS has streamlined the PA process, reducing wait times and improving transparency. Prior authorization is vital in managing healthcare costs, but inefficiencies in the process can create delays, contributing to patient dissatisfaction and administrative bottlenecks. CMS reforms to PA have been instrumental in facilitating the shift to VBC. By improving PA, providers can make decisions more quickly, leading to faster and more accurate care for patients.
The Role Of Interoperability In Value-Based Care
Interoperability—the ability of healthcare systems to communicate and share data seamlessly—is crucial for successful VBC. Without interoperability, providers lack access to the complete and accurate data needed to make informed decisions. This fragmentation creates barriers to care coordination, limiting VBC’s benefits. In a value-based system, it’s essential for providers, payers and patients to have access to the same information in real-time, ensuring coordinated care.
Interoperability is being achieved through the use of Fast Healthcare Interoperability Resources (FHIR) and Health Level Seven International (HL7) standards. These standards enable healthcare systems to exchange health data effectively. FHIR, for example, facilitates the exchange of patient records between electronic health record (EHR) systems, ensuring that providers have access to the most current information. HL7 standards allow for the seamless exchange of clinical data, such as lab results, imaging data and patient health histories, across different systems. By leveraging interoperable systems, healthcare organizations can quickly access a patient’s full medical history, enabling informed decisions that improve patient outcomes.
Challenges And Opportunities In The Shift Toward Interoperability
Although interoperability offers immense promise, achieving it on a wide scale isn’t without challenges. A key hurdle is the lack of standardization across healthcare systems. Different EHRs and health information systems often use different data formats and standards, complicating data sharing. Healthcare organizations are working to adopt FHIR and HL7 standards, but true interoperability requires collaboration between EHR vendors, payers, providers and policymakers.
Despite these challenges, interoperability presents significant opportunities. When systems exchange data seamlessly, they can avoid duplicating tests, prevent errors and help ensure that patients receive the appropriate care at the right time.
Conclusion: A Future Built On Policy Reform And Interoperability
The healthcare industry is undergoing a transformation. As VBC becomes more prevalent, the pressure to reduce costs while improving outcomes is greater than ever. Rising healthcare costs and the complexity of care delivery present challenges, but the convergence of policy reforms and interoperability standards offers new opportunities to address these issues. By advancing reforms like MACRA and CMS’s PA changes and supporting the adoption of interoperability standards like FHIR and HL7, we can create a more efficient, cost-effective and patient-centered healthcare system.
This article was co-written with CEO and co-founder Amber Nigam, a Forbes Business Council member.
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