Why a Fee-for-Value Model Is the Best Option For Health Care

By Dr. Robert Wieland

It’s no secret our world, and the health care industry, are constantly changing and adapting. New advancements are allowing for treatment options we couldn’t have dreamed about even five years ago. Patients are being treated in new and different ways and that shift means we need to change how health insurance is done as well. Many plans are still using the standard Fee-for-Service model which puts an emphasis on the quantity of care instead of the quality or value of care given. Moving toward a Fee-for-Value model is a win for everyone involved.

Behind the Scenes

The shift began about 15 years ago. Fee-for-Service (FFS) has been the standard in health care for as long as many can remember. You go to the doctor, they do a consultation, they may run a bunch of tests and possibly prescribe you a treatment option. In an FFS model, each of those services is paid for individually. It’s a mainstay in health insurance, with 97% of providers still using this model. FFS can be inefficient and incentivize providers to do more tests, procedures and visits than necessary without a return on better health outcomes for patients.

As more companies are innovating and disrupting the industry, it’s become clear the FFS model doesn’t work for all parties. People expect and deserve affordable health care with better outcomes. Yet, patients in the United States have the worst health outcomes of high-income nations and spend more than double the amount on health care as their peers in similar countries. As we look toward multidisciplinary, high-touch care, the quality of the care given should become the focus. It’s hard to change from the FFS model but if we are really invested in the value of the care and better health outcomes for members, we must make the switch to a Fee-for-Value model.

Fee-for-Value Model

The Fee-for-Value (FFV) model has gained traction over the years and contains several opportunities:

Unlocks the ability of providers to care for patients differently

An FFV model changes the way providers are able to approach care. Instead of paying for each service individually, they can be bundled. Instead of being unsure about what’s covered, it’s laid out in black and white and members are able to understand that they won’t be billed for each test that’s run or provider they see. And for those who are doing what they can to maintain or better their health, they’re rewarded for it with discounted memberships at gyms and reward programs that encourage them to make those healthy decisions.

Allows pre-payment to use resources effectively and lower costs

For older members on Medicare plans, an FFV model means all the providers–from health coaches to pharmacists and doctors–can work together to figure out the goal of care. Getting rid of the 20-minute office visits and focusing on shared treatment goals leads to innovation and allows resources to be directed where they’re needed most. Reconciled with a cost-per-member per-year system, the model becomes more cost-effective for all parties. Providing this cost clarity for Allina Health | Aetna members gives them the peace of mind that they expect from their health insurance.

Gives way to innovation in how to care for patients toward better outcomes

Focusing on the patient outcomes–based on specific measurements–means providers are incentivized to look at how they can make the best use of everyone’s time and money to achieve the best outcomes for their patients and members are provided the benefits and care they need for better health.

The Next Steps

How do we make a change when so many health care communities are entrenched in the FFS model? It’s not an overnight switch–changes of this magnitude take time, money and energy but there are a few ways to start the process. First, providers, insurers and patients need a shared understanding of what better health outcomes mean. This means creating measures that we know will result in better health and better lives for patients. From ensuring diabetic members follow care guidelines such as diabetic eye exams to recommending age-based preventive screenings like breast or colorectal cancer screenings, an FFV value rewards providers for taking those actions.

Second, providers and insurers should collectively commit to more experimentation to test FFV models. Providing health care is complex and we can’t change the entire system without better information. By innovating and testing different approaches we can apply what we’ve learned to help all involved. The last building block is a commitment from policymakers to support no or low-cost preventive screenings and services. Individuals are more adherent to recommendations when they have access to low-cost care.

The past few years have put a spotlight on health care. Mental, emotional and physical well-being are phrases we use nearly every day and should be things we are able to address instead of being afraid of what it will take out of our pockets.

When talking to members about their health insurance, many find their plans to be confusing. They don’t know what’s covered, what benefits and services they can take advantage of and are unsure where to turn for answers when they have questions. Giving providers and patients more control in an FFV model over the options available, while reducing costs, is a winning scenario for all of us.