If you’re in the senior living industry, you’ve probably heard the buzz around value-based care. It’s a concept that seems complicated but has the potential to revolutionize the way we provide and pay for care in senior living communities. So, what is it exactly, and why should you, as a senior living operator, be interested? We’re here to demystify it for you.
Understanding Value-Based Care
Traditionally, health care has been based on a fee-for-service model, where providers are paid for the quantity of care delivered. The more procedures and other services and materials they bill for, the more they get paid. In contrast, value-based care shifts the paradigm by linking payments to the quality of care. Providers are rewarded for helping people improve their health, reduce the effects and incidence of chronic disease, and live healthier lives in an evidence-based way.
The problem with the old way: fee for service
On the surface, this traditional model makes sense. Fee-for-service is how we’re used to buying most things. It’s how we pay our car mechanics and how we buy groceries. Why shouldn’t a care provider get paid by adding up all the services they deliver?
In the current model, we’re not spending our dollars in a way that matches what we know drives health outcomes. The fee-for-service model incentivizes reactive care and fast escalation to higher levels of care.
Value-based care: A better way
In contrast, value-based care incentivizes healthcare providers to think differently and pay more attention to the quality of care they provide and the outcomes they deliver.
To understand this a little better, let’s go back to the example of the car mechanic. What if your mechanic got paid not for each oil change, air filter, or major repair he performed, but for keeping your car running well? And what if his pay also was impacted every time you needed to call a tow truck or get roadside assistance? You can imagine the mechanic might start thinking a little differently about your car. He might get really proactive — figuring out how to spend 20 minutes monthly giving your car a tune-up so he could catch little problems early, for example. His relationship with the towing company might have to change. He’d want better data about how your car was running. It would truly be a paradigm shift.
That’s the idea behind value-based care: Be more proactive. Keep people healthier. And get financial incentives for those better results.
Why Value-Based Care in Senior Living?
Value-based care aligns perfectly with the core mission of senior living communities: to provide the best care and quality of life for their residents. By focusing on preventative care and effectively managing chronic conditions, we can enhance residents’ wellbeing while potentially reducing costly hospital visits.
Meanwhile, senior living operators are perfectly positioned to take a more central role in health care within a value-based care model. In fact, we believe senior living is the key stakeholder in the move to value-based care. That’s because 50-60% of total health care spending is on seniors (who are only 15% of the total population), and senior living impacts all the factors that drive health outcomes (environment, social, behaviors, etc.). If the industry and payors are serious about moving to value-based care, senior living must play a role.
For senior living operators, the value-based care approach offers an opportunity to demonstrate their value in tangible ways. In a value-based care model, operators are financially rewarded for delivering high-quality care — the healthier the residents, the higher the compensation.
The Core Elements of Value-Based Care
There are several key principles of value-based care that senior living providers need to understand:
- Preventive Care: Focusing on prevention rather than reaction, value-based care encourages early intervention and regular check-ups, leading to early diagnosis and treatment.
- Personalized Care: By incorporating individual patient characteristics, needs, and preferences into care plans, this model ensures a personalized approach to health and wellness.
- Outcome-focused: The model pays for health outcomes, not procedures. Providers are incentivized to use the most effective strategies to achieve the best results.
- Coordination of Care: Value-based care promotes coordination among various care providers, ensuring seamless transitions and reducing duplicative or unnecessary procedures.
- Technology and Data-Driven: This model relies heavily on data and technology to monitor patient health, assess risks, and track outcomes.
How Can Senior Living Operators Get Paid for Value-Based Care?
But how does a senior living operator reap these financial rewards? This is where Serviam Care Network steps in. We have created local Value-Based Care Alliances, designed to make the shift to value-based care as simple and rewarding as possible.
Here’s how it works:
- Your senior living community joins the local Alliance, with no upfront cost.
- Serviam equips you with everything you need to succeed in a value-based care system, such as technology, relationships, contracts, and incentives.
- You then operate a health model that improves outcomes for your residents.
- We all share in the financial rewards – a win-win-win situation!
The Time Is Now
Now more than ever, there is a need for change. As we navigate a world reshaped by a global pandemic, the focus on quality care is more critical than ever. And with increasing healthcare costs and an aging population, value-based care is not just an option but a necessity.
It’s time to play big, and together, we can. When you are a Member of the Serviam Care Network, you join a group of operators passionate about achieving the best outcomes for residents and who believe in the win-win-win potential of value-based care. Are you ready to join us?