Healthcare is shifting from volume to value. While fee-for-service still dominates, value-based payment models are growing rapidly. Understanding this landscape is essential for practice managers planning for the future.
Fee-for-Service vs. Value-Based Care
Fee-for-Service (FFS): The traditional model. Providers bill for each service delivered—office visits, procedures, tests. More services = more revenue. There's little incentive to coordinate care or keep patients healthy between visits.
Value-Based Care (VBC): Payment tied to outcomes and quality. Providers may receive bonuses for meeting quality metrics, shared savings from reducing total cost of care, or capitated payments for managing a population. Better outcomes = more revenue.
Common Value-Based Models
Accountable Care Organizations (ACOs): Groups of providers who share responsibility for a patient population. Medicare's MSSP program is the largest example.
Bundled Payments: Single payment for an episode of care (like a knee replacement), covering all providers and services.
Patient-Centered Medical Homes (PCMH): Primary care practices that meet certain care coordination and quality standards receive enhanced payments.
Quality Bonus Programs: Pay-for-performance programs that reward achievement on quality measures.
Quality Metrics That Matter
Value-based contracts typically measure preventive care (vaccinations, screenings), chronic disease management (A1C control, blood pressure control), patient experience (satisfaction surveys), care coordination (transitions, referrals), and utilization (ER visits, hospitalizations, readmissions).
Understanding which metrics are in your contracts—and how you're performing—is essential.
Positioning Your Practice
Success in value-based care requires strong primary care relationships, proactive chronic disease management, care coordination infrastructure, data analytics capabilities, and patient engagement tools.
Programs like CCM and RPM directly support these capabilities while generating FFS revenue today. They're bridge strategies that prepare you for value-based success.
The Hybrid Reality
Most practices will operate in a hybrid environment for years to come—some FFS patients, some value-based contracts. The key is building capabilities that work in both models while positioning for the inevitable shift toward value.
Hoss-Kick's care management programs help practices succeed in this hybrid environment, generating immediate revenue while building the infrastructure for value-based success.
