Why Transitioning from Legacy Fee-for-Service to Value-Based Care is So Difficult 

By Tyler Jung, M.D., Chief Medical Officer of Greater Good Health

In recent blog posts, we have explored why and how value-based care is so impactful (post 1 & post 2). I now want to dive deeper into something specific I wrote: “Not all primary care is positioned to drive value-based care. Primary care that is purposefully set up to change health is where I believe we will find the path to value-based care.” This is an important notion to explore and examine.

It is widely accepted that value-based care is effective – it is improving health outcomes, lowering wasteful costs, and enhancing the patient experience. The Centers for Medicare & Medicaid Services (CMS) aims to have all Medicare recipients, and a vast majority of Medicaid recipients, in value-based care arrangements by 2030. The goal is to move away from the traditional fee-for-service structure that focuses on volume of services rendered, and move to value-based care, which prioritizes quality and outcomes. If that is the case, it begs the question, why aren’t more providers operating a value-based care model? Why are so many patients still receiving care in a fee-for-service world?

The answer is simple: the transition from legacy fee-for-service to value-based care is incredibly difficult. Our country’s existing healthcare system is built on the premise of transactional reimbursement – see one (patient), do one (service), bill one. We know this system is not designed to optimize quality outcomes, but it is the way the system is set up and it is how reimbursement works. As a result, it’s particularly challenging to move to a value-based care framework because the system is intentionally designed for volume, not value. Change is hard in most circumstances, but changing an entire trillion-dollar industry? It is complex and overwhelming to even begin to know where to start. When you are used to getting paid for doing something like a medical procedure, how do you get traction and get paid for something that does not happen, such as a preventable ER visit?

Volume vs. value

I wrote about the importance of a care team, and how their work can empower a patient and change their health. A provider operating in the traditional fee-for-service structure is hampered by economic reality; the system simply does not allow providers to build a healthcare team around a patient to better care for them or interact with patients in-between visits. Importantly, there is no penalty for patients going to the hospital or urgent care. Providers aren’t onboarded or trained to have a value-based care mindset; they are onboarded with efficiency in mind. Simply put, they don’t have the time to think about how to change the overall health of the patient.

In the fee-for-service world, volume is critical; to keep a primary care office open and running, providers need to see between 25 to 30 patients a day. That means visits are about 15 to 20 minutes max where only one acute issue is addressed. We’ve all experienced this type of care and rushed appointment and know how frustrating it can be. In this model, the provider must save their time by writing referrals for anything more complex that can’t be handled during that short visit. In value-based care, you have the time to be much more accountable to the patient, which means you delegate less. You can address more than one concern during a visit and also have the time to be proactive rather than only reacting to problems or concerns. Providers who understand and operate in a value-based care mode are trained to think holistically about a patient and given the time to act in a way that supports that.

What fee-for-service groups can do

While provider groups and organizations that are purposely built from the ground-up for value-based care are best suited to drive value and be successful, there is hope for existing providers delivering fee-for-service. Greater Good Health can work with clients to create clinical programs that deliver on the promise of value-based care. We are built from the ground-up with a focus on enabling value-based care and our wraparound and primary care solutions improve both clinical and financial outcomes. For example, we have achieved a 5-star rating for our all-cause 30-day hospital readmission rate, a key indicator of high-quality, coordinated care that is helping patients recover safely at home. You can learn more about our proven outcomes in our 2024 Health Outcomes Impact Report.

About Greater Good Health
Greater Good Health is a premier partner for risk-bearing organizations in managing total cost of care. The company is enabling and expanding access to value-based primary care through its innovative suite of clinical solutions and its own primary care clinics for seniors in underserved communities. Greater Good Health’s proven Nurse Practitioner-led model reduces unnecessary costs, improves clinical outcomes and delivers a best-in-class patient experience.

For more information, visit www.greatergoodhealth.com.