The FAMCare Blog

Transitioning from Fee-For-Service To Value-Based Healthcare

Posted by GVT Admin on Jun 4, 2019 12:55:50 PM

Transitioning healthcare

The United States has the highest costs for healthcare of any industrialized nation and some of the worst health outcomes. The traditional fee-for-service model of delivery and payment is now seen as an ineffective model in terms of health and well-being. It is considered part of the reason the United States has such a poor healthcare ranking.


Fee-for service (FFS) is healthcare’s most traditional payment model where physicians and healthcare providers are reimbursed by insurance companies and government agencies (third-party payers) based on the number of services they provide, or the number of procedures they order. In the traditional healthcare model, patients must manage their own care path, moving from primary care physician, to specialist and then to a 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. Essentially, what is missing from fee-for-service is an acknowledgement of the quality of care. When providers only have to account for the action, the outcome becomes less important.

Value-Based Care

You might say that Value-based care is a philosophy of healthcare. It is realized when clinicians intentionally consider the quality of care provided and the overall outcomes of that care in relation to cost-efficiency.

Clare Pierce-Wrobel“At the most simple level, value-based payment and care delivery is thinking about how we’re reimbursing for healthcare services and is considerate of the patient experience and outcomes, as well as the total cost of care,” says Clare Pierce-Wrobel, MHSA, senior director for the Health Care Transformation Task Force in an article from Social Work Today. “In value-based care, the risk is being shifted onto the providers, from the payers. The providers will be responsible for the risk of inappropriate or ineffective care. How exactly that may look depends on the type of value-based model used but may mean that a provider is paid for an episode of care, such as a hip replacement and any complications that may stem from it.” 


The Affordable Care Act (ACA) recognized the shortcomings of our fee-for-service healthcare legacy and included provisions intended to promote the delivery of, and payment for, services based on outcomes (value) rather than quantity. However, in 2016, the American Medical Association found that “an average of 70.8% of practice revenue was still received through FFS [Fee-for-Service], and 80% of physicians worked in practices that received at least some revenue from FFS. So, even as fee-for-service has been found to be the culprit, the transition from FFS to a Value-Based System of delivery and payment has been slow and laborious.

Not So Fast – Transition Hurdles

“There’s a challenge in transitioning away from [fee-for-service]. You can’t exactly shut down the whole health system. Transition has to happen over time,” Pierce-Wrobel says in the Social Work Today article. “When only a small portion of your contracts are tied to value, the majority of reimbursement is still tied to volume. It can be really hard for providers and payers to justify the kind of investments needed to change from volume to value.” 

Health Providers Are Not Fully Equipped

healthcare-1What’s more, traditional providers have never been trained to look at health outcomes from this perspective. For best outcomes, providers must consider more than the patient’s physical or behavioral health diagnosis. They must address environmental, socioeconomic and related factors that influence population health outcomes more significantly than the availability of medical care. These social determinants of health, according to Healthy People 2020, are the “conditions in the environments in which people are born, live, learn, work, play, worship and age that affect a wide range of health, functioning, and quality-of-life outcomes and risks”.

Social Workers’ Role

Because each provider is required to bill individually [in fee-for-service], the model actually disincentivizes team-based care and the provision of preventive services. Value-based care reimburses for both team-based care and preventive services, which include both early detection and intervention. The move toward value-based care is encouraging providers to screen individual patients and arrange referrals for non-medical, health-related service needs involving food security, housing stability, utilities, transportation and interpersonal safety.

The skill set that social workers have and can contribute to a provider’s team is directly in line with the goals of prevention and intervention in value-based care models. For this reason alone, social workers have a critical role to play in transitioning healthcare toward outcome centered care.


Topics: public health, healthcare, healthcare issues

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