Health equity and value based care

In an ideal scenario, we’d always focus on quality over quantity in healthcare.

Doctors would be empowered to take the time and care to treat patients, rather than be rewarded for logging as many visits and procedures as they can. They would profit not from the amount of services they provide, but from the outcomes they deliver—and as a result, more people would leave the healthcare system happier, healthier, and feeling more supported than ever.

While we unfortunately don’t live in a perfect world, there has been a shift in the last few years toward value based care and away from fee for service, the traditional healthcare system in which physicians are inclined to overtest, overtreat, and ultimately drive up prices for everyone.

We can talk all day about the benefits of value based care, beyond what’s outlined above, but arguably one of the most crucial ones is how it inherently promotes health equity. Below, we’ll explain what this means and why it’s important.

What is value based care?

Value based care is more or less what it sounds like—delivering true value for the patient is the basis for all diagnoses and treatment decisions. The National Academy of Medicine defines “value” or quality of treatment with the acronym STEEEP: safe, timely, effective, efficient, equitable, and patient-centered. This, of course, can be difficult to measure, which is why many providers take their own approach to value based care.

Generally, though, costs and revenue are decided based on factors such as how well a physician or healthcare facility avoids unnecessary tests, surgeries, or treatments; minimizes risks; handles disparities in care, such as worse outcomes for marginalized populations; and collaborates with other providers to improve efficiency, costs, and the overall patient experience.

Common value based care models include but are not limited to accountable care organizations—groups of providers incentivized to coordinate and work together to deliver low-cost, high-quality care—alternative payment models such as bundled payments or episode-based payments, and patient-centered medical homes.

What is health equity?

Health equity, the idea that every patient is given a fair shot at reaching the healthiest outcome, can only be achieved by recognizing and addressing health disparities, which are “preventable differences in the burden of disease, injury, violence, or opportunities to achieve optimal health that are experienced by socially disadvantaged populations.”

One stark example of this is mortality rates: According to a 2020 fact sheet from the independent policy institute The Center for American Progress (CAP), when compared to other racial and ethnic groups, African Americans have the highest mortality rate for all cancers combined. CAP also reports that the Hispanic, African American, Asian American, American Indian, and Pacific Islander American communities have higher percentages of uninsured individuals and chronic disease conditions than non-Hispanic white communities.

2 huge ways value based care promotes health equity

Value based care is a major asset in creating a healthcare system that’s fair and equitable, as it ensures that patients of all backgrounds receive thoughtful, appropriate, affordable, and high-quality care. Other ways it successfully supports health equity include:

1. Providers are incentivized for better health outcomes

When outcomes outrank volume of services, each patient—no matter their race, gender, socioeconomic status, or other demographic—receives a holistic approach to care.

Doctors are encouraged to take in the whole person rather than focusing solely on a specific symptom or condition, and thus to delve deeper into a person’s background to uncover potential barriers to treatment—such as whether they have access to reliable transportation or a healthy and balanced diet, or what their family or home dynamics are like.

The National Institute on Minority Health and Health Disparities, for example, reported that 20% of Black households and 16% of Hispanic and Latino households were food insecure at some point in 2021, while only 7% of White households faced food insecurity. When overlooked by doctors, food insecurity has been shown to lead to diabetes, obesity, heart disease, mental health disorders, and other chronic diseases.

This streamlined and personalized care will lead to better results, and we can prove it: Kate Goodrich, the chief medical officer at Humana, recently shared data from her team that found that Medicare Advantage patients receiving value based care saw their primary care physicians more than patients who didn’t receive value based care, and also spent more time with their physicians during each visit. She also reported that value based care patients experienced fewer hospital admissions and emergency room visits than those on a fee for service plan.

2. It lowers costs, making healthcare accessible and affordable for more people

Half of American adults struggle with healthcare costs, independent policy research firm KFF reports—and one in four individuals postpone or skip treatment because of the financial burden.

The gap is even worse for marginalized communities, with 60% of Black adults and 65% of Hispanic adults having difficulties affording healthcare. As a result, around 40% of adult patients in the country have medical debt.

Value based care is one solution for decreasing costs on the patient’s end so that anyone and everyone can afford the appropriate care. A tailored approach not only reduces unnecessary and often expensive tests and treatments but also places as much emphasis on preventative care—meaning patients can preempt problems before they require significant intervention.

For example, a patient experiencing muscle pain under a value based care provider will likely be encouraged to go to physical therapy rather than resort to surgery, a much more costly route. Value based care may also lead to doctors catching cancers earlier, resulting in fewer treatment costs (which can be exponential) long term.

Other value based solutions, like Carrum Health, can decrease costs even further for customers, with members paying little to nothing for surgeries or cancer care. Considering that, say, knee replacement surgery in the U.S. costs $20,000 on average—and some studies put the cost at up to $200,000 in total—this can be a huge relief.

The future of care must be value based

Our country’s demographics are rapidly shifting, further amplifying concerns around health equity and the significance of value based care. By 2050, the U.S. Census Bureau projects, people of color will comprise more than half of the U.S. population. If we care about our nation’s health and prosperity, we cannot ignore health disparities or pass over opportunities to reach an equitable system.

Striving for perfection may not be realistic, but better solutions to healthcare than racking up bills exist—if only we choose to get behind them.

The information contained on this page is for informational purposes only. No material is intended to be a substitute for professional medical advice, diagnosis, or treatment.