The move toward value-based care has caused independent physicians to move from a fee-per-visit model to payments based on quality healthcare outcomes for their patients. The trend has created a situation for many independent practices in which they need to be more efficient, particularly in regard to costs for treatment that may not be immediately reimbursed. A cost-benefit analysis integrated with the physician’s value-based care model may help in that area.
Research recently published by Joel Tsevat, MD, MPH, professor of medicine at UT Health San Antonio, calls for a “convergence” of cost-benefit analysis and value-based healthcare. Tsevat has identified the key differences in the two as being time, perspective, and the ability to maximize outcomes.
While value-based care focuses on shorter timeframes, such as a 30-day plan of care, cost-effectiveness analysis tends to look at the longer term, often as long as a patient’s lifetime. Cost-effectiveness analysis, viewed from a more societal or health care sector perspective, can actually benefit from “drawing on value-based healthcare’s patient-centered approach,” Tsevat says. Conversely, “value-based healthcare could benefit from the capability of cost-effectiveness analysis to gauge tradeoffs—the costs for the benefit.”
In the research report, Tsevat states that “Value-based health care focuses on maximizing outcomes achieved per dollar spent. As such, it bears many similarities to a well-established method, cost-effectiveness analysis (CEA), which provides a framework for comparing the relative value of different diagnostic or treatment interventions.”
Understanding the cost-effectiveness analysis could become a critical component of efficiency and financial stability for the independent practice. Value-based care will be rewarded, but the independent physician must gauge the costs and weigh them against the returns. As Tsevat emphasizes, “value-based payment has emerged as a visible component of VBHC (value-based healthcare) and is gaining a foothold in the United States in various forms, particularly bundled payments and accountable care organizations, in an effort to reward high-value care and disincentivize low-value care.”