Shift from Volume to Value-Based Healthcare: Economic Principles and Implications

Running head: HEALTHCARE
Healthcare
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1HEALTHCARE
Healthcare reforms in the country are facing a drastic change in the recent times due to
varied factors, the impact of which is on the care delivery process. This has led to a shift from
volume-based, focusing on fee-for-service care, to value-based care emphasizing on efficiency
and quality. The present paper analyses the economic principles that are the cause of the shift
mentioned above. Implications of this volume to value shift is also highlighted. Lastly, an
example is provided of how the shift has affected professional practice.
Noteworthy challenges had emerged in the last few years within the healthcare system of
the country in relation to the quality of care delivered and costs of service delivery. Volume-
based care brought about certain economic challenges that had compelled the shift to value-
based care. At the micro-economic level, hospitals, physicians and other care providers had been
gaining increased profits and revenues by delivery of more services to consumers. This had led
to the fueling of inflation in healthcare costs in the country in absence of any analogous
development in outcomes. Further, the payment system implemented on a national scale
frequently penalized providers for maintaining health of the patients, cutting down errors and
complication, and eliminating redundant care. This is a macro-economic phenomenon since it
involves the national healthcare system as a whole. Such a situation brought into focus the needs
of alternative care system which is the value based care system (Putera, 2017).
The value based healthcare delivery has many benefits for the patients, care providers,
payers and the society. The first implication of the system is that patients are to spend less money
for achieving better health. Value based care model has the focus on supporting patients to
recover from health conditions in a more rapid manner. Patients would therefore face less
number of medical tests, and physician’s visits since chronic diseases can be avoided in the first