Glossary Term

Value-Based Care

Value-based care is a phrase used to describe health care models that emphasize quality in health outcomes and efficiency in health care delivery. Value-based care attempts to achieve these goals by setting health care reimbursement rates to reward successful completion of quality and efficiency objectives and penalize their failures. Such a reimbursement strategy is sometimes called an Alternative Payment Model.

One of the assumptions of value-based care is that the traditional model of Medicare payment, fee-for-service (FFS), encourages overutilization of medical care. The rationale behind this assumption is that doctors financially benefit from supplying more treatment than is necessary and that conflict of interests produces unnecessary care and costs.

One example of an implementation of value-based care is an accountable care organization (ACO). ACOs have a variety of payment schemes but the model generally seeks to increase health care provider compensation based on the satisfaction of requirements related to medical efficiency and quality.

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