A value-based healthcare model promises to deliver the most value for money and simultaneously the highest quality care for patients, industry research has revealed.
According to the Grattan Institute, “complications cost the Australian hospital system more than $5 billion a year; hospital-acquired infections alone cost about $1 billion of that. Not all complications can be avoided, but some hospitals do much better than others…
If we improved care in all our hospitals – public and private – so the rate of complications was brought down to the complication rate achieved in the best 10 per cent of hospitals, then 250,000 more people would leave hospital each year free of complications.”
This would equate to $1.5 billion in savings annually.
While public hospitals receive extra funding for treating sicker patients (even if their condition was worsened due to a complication while under care), The Grattan Institute’s research indicates the cost of complications was larger than the additional funding.
“On average, a complication cost the hospital more than three times the extra revenue it received.”
Australian healthcare, however, is moving away from fee-for-service. Value-based care is gaining traction as healthcare facilities begin to realise the possibilities this model offers. Providers are paid based on patient health outcomes and rewarded for improving the health of patients and reducing the effects of chronic disease.
As outlined by Catalyst, the benefits offered by value-based care are evident:
Patients spend less money to achieve better health
Providers achieve efficiencies and greater patient satisfaction
Payers control costs and reduce risk
Suppliers align prices with patient outcomes
Society becomes healthier while reducing overall healthcare spending
Alison Verhoeven, Australian Healthcare and Hospitals Association Chief Executive, believes value-based healthcare and public commitment to better value for money is needed in our healthcare system.
“We need to shift the whole system to value-based healthcare—that is, better outcomes for patients relative to costs—or the right care in the right place at the right time by the right provider,” she said.
“This will often involve teams of health professionals providing ongoing care for chronic conditions—this has been proven internationally to be more effective, more timely and better value than traditional care systems.”
Verhoeven also calls for the need for investment in appropriate research into best-value care. AHHA’s recent launch of the Australian Centre for Value-Based Health Care supports this work.
Goals of the centre include enhancing the understanding of value-based health care, building the skills for implementation and influencing public policy towards the transition with a focus on a patient-centred model of care.
Hear from the Grattan Institute, AHHA and a panel of healthcare experts at the 4th Annual Financial & Operational Improvement in Hospitals, running at Novotel Sydney Central from 22 – 23 October 2019. The event explores the value-based healthcare journey, identifies strategies for maximising activity-based funding and easing financial pressure through alternate revenue streams.