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Shifting From Fee For Service (FFS) to Value-Based Care (VBC) Model

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No doubt, Egypt start a new healthcare era with a plan to almost rebuild all healthcare infrastructure, which is what we already witness especially with the new universal health insurance law.

and the good thing is that it’s clear that the vision is ” the value”, to provide a valuable service with a minimum level of cost, which is represented in Establish a new independent authority for the accreditation and registration of health care service providers

so, we here to say that It’s not the debate around health coverage for all nor the question of whether to repeal or expand the Affordable Care Act. It’s about how we can shift from such financial models that only target for massive volume to other models in which value leads the whole cycle, the continued shift from Fee For Services (FFS) models to a system of Value-Based Care (VBC).

As healthcare regulations change, so do healthcare provider reimbursement models, definitely, these changes will make a big difference in the future of Egyptian healthcare.

so, we need to understand the difference between forms of reimbursement and their advantages and disadvantages, which can help you better figure out your healthcare organization’s revenue cycle management (RCM).

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There are many reimbursement models that any healthcare system can use but we here to talk about the most common model “fee -for service (FFS)”, and how we can smoothly shift to add value to the provided healthcare services “value-based-care (VBC).”

(VBC) is a long-term solution to the healthcare system’s cost and service inefficiencies, so, it’s critical for employers to become familiar with these terms.

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FEE-FOR-SERVICE (FFS) Model

Fee for service model in healthcare

The fee-For-Service reimbursement model is the traditional, widely used healthcare model in many healthcare systems.

simply we can describe this model as “volume-based care.”, where providers aim to increase the number of tests, procedures, or visits ordered.

In this model, healthcare providers get paid based on individual services rendered (appointments, treatments, tests ordered, prescriptions given). Billing these services separately, which makes them long and complicated many times especially with the long period of stay.

On other hand, this model caused that many providers focused on taking more and more patients in order to make more money, focus on the number of services they can provide to their patients, and sometimes it gets worse when some service providers perform medical services regardless of their necessity.

This model encourages healthcare providers to fill as many beds and perform as many high-tech procedures, as possible. which drives up the cost of healthcare and doesn’t improve patient outcomes.

so, as Egyptian government healthcare regulations change and public demands for better quality and easier-pay for healthcare grow louder, many are trending away from this model.


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VALUE-BASED-CARE (VBC)

value based healthcare

On the other hand, in the value-based care (VBC) model, quality comes first, and with the restricted reimbursement based on these metrics, providers will prioritize patients.

Value-based care answers the question that all providers ask: how are you going to pay for that?

Simply, value-based care (VBC) links reimbursement incentives to the outcomes of the care they provide based on the overall quality of care and cost-efficiency instead of volume, which incentivizes practice efficiency, cost control, and patient improvement.

The transition to (VBC) is about how to measure healthcare services quality and how payments are reimbursed.

This requires basic changes on the part of providers, their vision of services quality, patient satisfaction, certainly a perfect clinical outcome for patients, and lower costs for payers.

benefits offered through this model drive providers to create longer-lasting, more effective environment and build friendly relationships with their patients. as an example, providers may actually be extra-paid for patients who don’t need to return for more appointments or treatments for a specific medical condition also using new technologies such as telemedicine.

Challenges of Value-Based Care Transformation

value based healthcare challenges
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The healthcare sector deals with an outrageous amount of data and a long-running challenge has been in how an organization can record, access, and share that data effectively.

With a value-based care model, however, the issue gains an added level of complexity, now that the goal is care quality and patient outcomes, different data points need to be collected and solved.

Data in a value-based care model may require an overhaul of the whole system, software’s, which can be costly and time-consuming.

Also, Revenue streams can be unpredictable in the first early cycles of a switch to value-based care and resources will often be stretched thin to cover for departments within a healthcare organization that can’t make the transition as easily as others.

A lack of resources also is a big challenge for healthcare providers in transitioning to value-based care.

In the value-based care (VBC) model, the reimbursement model has been growing in popularity in recent years as patients seek out simpler and higher-quality healthcare services, so, in this model, reimbursement is based on the quality of care provided, it bases bills on patient satisfaction and positive outcomes.

finally, (FFS) models may not be completely on their way out of the healthcare industry, but value-based care models are definitely pushing their way in.

With government support backing (VBC) as a result of GAHAR regulations, patients can expect to see (VBC) models becoming more and more popular as time goes on.

This process will not be smooth, however. Many healthcare providers and organizations are still tied to (FFS) models, and it will take a lot of time and energy to make the switch.

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Ahmed Ezz Eldin
Ahmed M. Ezz EL-Din, MBA - is a Senior Cost accountant for healthcare services in Egyptian General Authority of Health Insurance, Former member of the Standing Committee for Pricing of Medical Services in universal health insurance (UHIO), experience in calculating healthcare services costs and preparing price lists for health care services, has established the cost system in many governmental and private hospitals also participated in preparing healthcare service price lists in the Egyptian Ministry of Health and Universal Health Insurance (UHIO)

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