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What Is Value-Based Care?

At Dartmouth-Hitchcock, we talk about basing health care on "value, not volume." What does that mean?

In the current fee-for-service model of reimbursing providers for health care, physicians and organizations have incentives to 'do" more. The more tests you order, patients you see, procedures you do, the more money you will make.

One result of this payment based on volume model is enormous variation in rates of procedures and tests such as imaging and screening. As documented by The Dartmouth Atlas of Health Care, there is a 2.5-fold variation in Medicare spending nationally, even after adjusting for differences in local prices, age, race and underlying health of the population. This geographic variation in spending is unwarranted; patients who live in areas where Medicare spends more per capita are neither sicker than those who live in regions where Medicare spends less, nor do they prefer more care. Perhaps most surprising, they show no evidence of better health outcomes.

One way of addressing this variation – and giving patients the care they want and need – is to move to a reimbursement system that is value-based. We speak of it as "the value equation": Quality over Cost over Time.

For patients, this means safe, appropriate, and effective care with enduring results, at reasonable cost. For us, it means employing evidence-based medicine and proven treatments and techniques that take into account the patients’ wishes and preferences.

A critical component of understanding value is measurement. How can we know what works unless we measure our results and track them over time? Any patient considering a procedure should be able to know from their physician what it will cost and what his or her results will be, with fi rm data, from performing that procedure?

Without that data, patients lack the tools to make informed choices. We would not accept this absence of information when we buy a car or dishwasher or any other kind of product or service; why should it be acceptable in health care.

A focus of health reform has been to more closely track value measures such as complications, hospital-acquired infections, and readmissions. Hospitals now face financial penalties if their rate of readmissions is too high, for example.

Through our Value Institute and quality and safety efforts, we are determined to be a leader in delivering value. Our readmission rates are in the lowest 1 percent in the nation for chronic heart failure, and at the top 5 percent for effectiveness and efficiency.