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How Value Based Care Differs From Traditional Care

Definition of Value-Based Care

Value-based care is a philosophy of healthcare achieved when professionals intentionally consider the quality of care provided, and the overall outcomes of that care, in relation to cost-efficiency. In the value-based care model, doctors and specialists use evidence-based data to consider “best practices” when treating patients, since they are reimbursed for the quality and efficiency of care they provide. 

The beginning of Value-Based Care

With the proposal and implementation of the Affordable Care Act (ACA) in 2010, lawmakers searched for ways to reduce the national deficit. Baby boomers would soon be entering retirement age, and the costs of caring for the elderly and disabled Americans were expected to soar. Medicare became the target for deep cuts, causing the Center for Medicare and Medicaid Services (CMS) to design a new strategy of accountable healthcare, with the hopes of providing better care for individuals and better health for populations, at reduced costs.  An array of value-based care programs and payment models was the result, such as the Hospital Value-Based Purchasing Program (HVBP), the Hospital Readmissions Reduction Program (HRRP), the Merit-based Incentive Payment System (MIPS), and Alternative Payment Models (APMs) to name a few. These initiatives associated payment for healthcare directly to the quality of care provided, rewarding providers for delivering high quality, efficient clinical care.

How is value-based care different from traditional care?

In the traditional healthcare environment, physicians are reimbursed based on the number of services they provide, or the number of procedures they order. This is known as the “fee-for-service” (FFS) reimbursement model. For example, every time you have a doctor’s appointment, a surgical consultation, or a hospital stay, you will pay for each test, procedure, doctor visit, and treatment provided, even though some of these may not be needed, or supported by evidence-based data. In his article, “What is Value-Based Care,” Lenny Sanicola explains, “The FFS payment model for health care is considered one of the major drivers of high costs because it encourages and incentivizes the use of more (and expensive) services. It drives volume, not necessarily value, as payments are dependent upon quantity, not quality.” In other words, healthcare providers are paid for the amount of services they perform, which invites them to order more tests and procedures, as well as to manage more patients, for the reward of getting paid more. The value-based model of healthcare shifts the emphasis of care from rewarding how many tests and services are ordered to rewarding physicians for providing appropriate, coordinated care that keeps patient populations healthy.

This shift in healthcare strategy is extremely beneficial to the patient population, because it delivers a connected care experience where patients receive more coordinated, appropriate, and effective care, improving the health of individuals and their communities.

In the traditional healthcare model, many times patients are left confused and frustrated trying to navigate through the healthcare system alone. For example, patients must manage their own care path, moving from primary care physician, to specialist, and then to surgery center in a way that is often complicated and unpredictable. In addition, patients may see multiple doctors, specialists, and surgeons who do not communicate with each other, or have access to the same important, patient data. In the traditional model, providers lack the technology and the incentives to coordinate patient care across the health care system, so they stay independent, using the fee-for-service payment model, which ultimately drives up healthcare costs.

Value-based care programs were designed to drive down healthcare costs and to improve patient care and population health, by rewarding healthcare providers for considering overall patient care, outcomes, and costs. In the new value-based care model, healthcare professionals are encouraged to engage with patients, to provide care appropriate to each individual’s circumstances, to invest in new technology, to evaluate process, performance and data, and to align their efforts with multiple providers, taking a team approach to healthcare. This shift in healthcare strategy is extremely beneficial to the patient population, because it delivers a connected care experience where patients receive more coordinated, appropriate, and effective care, improving the health of individuals and their communities.


North Texas Clinically Integrated Network, Inc. (dba TXCIN) is a non-profit ACO that began in late 2014. A small group of independent physicians aligned to initiate clinical integration and value-based contracting. Partnering with RevelationMD and its state-of-the art information platform, TXCIN has become the largest independent network of physicians in North Texas.


Sanicola, Lenny. “What is Value-Based Care?” HuffPost. February 2, 2017. https://www.huffingtonpost.com/entry/what-is-value-based-care_us_58939f9de4b02bbb1816b892


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