Value-Based Care: What Is It and Why Is It Better?

According to the American Medical Association, health spending accounted for 18.3% of the United States GDP in 2021. This equates to $4.3 trillion or 12, 914 per capita, the highest among developed nations, as reported in a study by John Hopkins University. As an employer, the need to rein in spending while ensuring your employees are healthy and productive is also a growing problem. The solution to this problem lies in Value-Based Care, a payer model we have utilized since our inception in 1982.

In the traditional fee-for-service model, healthcare providers are paid a set amount for each medical service provided. Value-Based Care (VBC) on the other hand, pays providers on the health outcomes of their patients and the quality of services rendered. In addition to negotiated payments, providers can earn incentives for providing high-quality, efficient care. Quality care can be provided under both models, but it’s the difference in how providers are paid, paired with the way patient care is managed, that creates the environment for monetary savings to be realized.

To do this, the Live360 Health Plan value-based care model takes a much more proactive approach. Many think of the healthcare system as one that takes care of people after they’re already sick. But why would you only play defense? At Live360, we prefer to improve the health of our members and therefor reduce the cost of their healthcare overtime by also having a strong offensive game. With a team-oriented and data-driven approach working across the care continuum, we can work to engage with members and providers to help our clients better manage their total health and costs. 

Our team of triage nurses, health coaches, case managers, chronic disease managers, pharmacists, physician-led board of directors, etc. all work together to help identify and preventively address member healthcare needs. These wellness efforts and care coordination strategies help better manage chronic conditions and improve overall population health. For example, a member with a history of diabetes, hypertension, and chronic obstructive pulmonary disease (COPD), and not regularly being seen by a provider, became hospitalized with pneumonia and was discharged with supplemental oxygen. In addition, he was gaining weight and had elevated blood sugar. Through enrollment in our disease management program, which is free for our members, he has made significant lifestyle changes, lost weight, improved blood sugars, and has resumed regular visits with his primary care provider. Overall, the member is motivated to become healthier, and he feels energetic and more in control. Our case management nurse checks in with him frequently to ensure he is staying the course. 

We want to be clear that savings do not come from the denial of services. On the contrary, we average about four member appeals per quarter. The VBC model helps our clients save money through:

  • Established care standards based on best practices.
  • Proactively addressing risk factors through data and early detection.
  • Direct communication and engagement with members.
  • One-on-one management of complex cases and chronic conditions by an assigned registered nurse to better avoid late-stage interventions and hospitalizations.
  • Better pharmaceutical utilization and adherence, including encouraging the use of generics and biosimilars when appropriate with providers.
  • Enhanced care coordination and data sharing to streamline administrative processes for prior authorizations and claim payment and reduce wasted spending on things like duplicative tests

By working together to analyze data, identify gaps in care, and communicate one-on-one with patients who are currently struggling to manage a treatment plan or condition, or those who are at risk for this, Live360 can achieve considerably better outcomes for a lower cost. When evaluating plans as an employer, we challenge you to ask the other insurance carriers about their value-based care approach. Live360 utilizes this model for every single one of our commercial groups (and every Medicare member), no matter the size of your group or the type of plan you select.

Interested in learning how our value-based care model can both save you money and improve the health of your employees? Contact us today at 563-556-8070, toll free at 1-800-747-8900, or click here to request a free quote.


American Medical Association

John Hopkins University