Why is value-based payment important?
As its name implies, the value-based payment strategy in healthcare rewards providers for the high calibre of care they offer rather than for the amount of care they provide. In other words, the compensation for clinicians is determined by the clinical outcomes of the patients. The traditional fee-for-service method of healthcare reimbursements, in contrast, pays providers in accordance with the volume of services they perform. Among the services provided are examinations, scans, prescriptions, and consultations.
Service providers are encouraged by the fee-for-service business model to offer extra services, some of which can be superfluous or even redundant. As a result, the cost of care ultimately rises. On the other hand, the valuebased paradigm prioritises patient outcomes.
Source: https://www.osplabs.com/healthcare-payment-system/