A 5-Point Model for Value-Based Healthcare

Many Americans seem to expect lawmakers to provide a new model for how healthcare is delivered. But the answers may come from places other than Washington. A core element of the solution is value-based care, in which healthcare providers are compensated for the health and well-being of their patient population rather than for services rendered.

Hospitals’ focus on filling their beds and offering the latest high-tech procedures drives up healthcare’s cost without necessarily improving overall health. But change is starting to happen. According to the U.S. Department of Health and Human Services, the percentage of healthcare payments tied to some type of value-based care reached 34 percent in 2017 , increasing at a steady pace from 23 percent over a two-year span.

Intermountain Healthcare, the healthcare nonprofit I lead, is making the pivot very quickly and seeing it work well. Here are the five core principles behind this transformational model we have identified:

SPEED UP THE CONNECTION BETWEEN SCIENCE AND PATIENT CARE: The ways to improve public health should be based on the best science. At Intermountain Healthcare, we’re collaborating with deCODE genetics, a company in Iceland, on a DNA-mapping effort to discover new connections between genetics and human disease that could save lives.

BE WILLING TO DISRUPT THE TRADITIONAL MODEL OF PHARMACEUTICAL PRODUCTION: Some drugs have become unjustifiably expensive or scarce. Intermountain Healthcare has joined with three philanthropies and healthcare organizations representing more than 1,000 U.S. hospitals to found Civica Rx , a nonprofit whose mission is to ensure that essential generic medications are accessible and affordable.

LINK HEALTHCARE PROVIDERS AND HEALTH INSURANCE PROVIDERS: If a person is healthy, a hospital will not benefit unless the hospital is closely linked to the insurance provider. Providers and payers should work together in increasingly close collaborations, so that they share the risks associated with poor health and the benefits associated with good health. At Intermountain Healthcare, we are developing a range of such collaborations.

IMPROVE HEALTHCARE WHILE REDUCING ITS COST: Traditional incentives are wrong. Hospitals should benefit from better care rather than more care, and that’s possible when providers share risks and benefits with insurers, as Intermountain Healthcare does with SelectHealth, its own health insurance company.

WORK WITH THE PUBLIC TO CONFRONT THE SOCIAL DETERMINANTS OF HEALTH: Much of health is influenced by preventable conditions like obesity, poor nutrition, smoking, lack of exercise, inadequate housing, lack of education and lack of access to transportation or technology. We must engage the public in changing lifestyle behaviors and living environments and assist them in achieving that goal. Intermountain Healthcare is leading a new collaborative, the Utah Alliance for the Determinants of Health , which was formed to promote health, improve healthcare access and decrease healthcare costs.

This emerging model of healthcare delivery relies on innovation and the shared commitment by the many stakeholders in the complex network of healthcare. We must revive the pioneering spirit that used to be pervasive throughout the nation. It will require us to look not to politicians but to each other, and pivot to a new model of care. If we combine that pioneering spirit with goal-oriented practicality, our nation’s future will be healthier and promising.

Copyright 2019 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate.