How do "value-based payment" models operate?

Value-based payment models operate by linking reimbursement to the health outcomes achieved for patients rather than the quantity of services provided. This approach emphasizes the quality of care, aiming to improve patient health and overall health system efficiency. Under this model, health care providers are rewarded for effectively managing patient care and achieving desired health outcomes, which can lead to better patient satisfaction and lower overall health care costs.

The focus is on how well providers perform in terms of delivering effective care and enhancing patients' health rather than simply how many services they render, which is the hallmark of volume-based payment models. As a result, these payment systems aim to incentivize providers to focus on preventive measures, chronic disease management, and improving long-term health outcomes. This shift aligns financial incentives with the goal of delivering high-quality care and improving public health.