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Home » How policy reform and interoperability form value-based care
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How policy reform and interoperability form value-based care

adminBy adminMarch 20, 2025No Comments4 Mins Read
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Arpan Saxena is the COO/CIO of Basys.ai (based at Harvard University).

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The healthcare industry is undergoing major changes as the shift towards value-based care (VBC) takes the central stage. As sectors move away from service charge models, rising costs and evolution of management models pose new challenges. However, policy reform and interoperability standards create opportunities to improve patient outcomes, reduce costs and streamline management processes. There are hurdles on the road to VBC, but ongoing changes could transform patient care delivery and improve care across the country.

Value-based care challenges

Value-based care encourages providers to provide high-quality care by rewarding positive health outcomes such as reduced hospital readmissions, rather than simply paying for the number of services provided. This volume-to-value transition encourages providers to provide care more efficiently and reduces overall healthcare costs.

However, the migration to VBC is not without its challenges. Many healthcare organizations are still tied to traditional service pricing models, and switching to VBC requires heavy investments in new technologies, infrastructure and training. Providers must adjust their practices to reimbursement criteria to integrate the new data sharing system and fully participate in VBC. Despite these hurdles, VBC offers opportunities to reduce long-term healthcare costs while improving the quality of care provided to patients.

Policy changes and CMS reform as enablers

Policymakers are pushing for reforms that promote VBC and have made great strides over the past decade. The Medicare Access and Chip Reauthorization Act (MACRA) is an important reform that encourages healthcare providers to adopt the VBC model. MACRA encourages providers to move from service charges to service charges to alternative payment models such as merit-based incentive payment systems (MIPS) and advanced alternative payment models (AAPM).

The Centers for Medicare and Medicaid Services (CMS) plays a pivotal role in reforming the pre-authorization (PA) process to reduce the management burden on providers. CMS streamlined the PA process, reduced latency and increased transparency. While previous approvals are essential to managing healthcare costs, inefficiencies in the process can create delays and contribute to patient dissatisfaction and management bottlenecks. CMS reforms to PA helped to drive the transition to VBC. By improving PA, providers can make decisions faster and lead to faster and more accurate care for patients.

The role of interoperability in value-based care

Interoperability – The ability of healthcare systems to communicate and share data seamlessly is critical to the success of VBC. Without interoperability, providers do not have access to the complete and accurate data needed to make informed decisions. This fragmentation limits the benefits of VBCs and creates barriers to adjustment of care. In a value-based system, it is essential that providers, payers and patients have real-time access to the same information and ensure coordinated care.

Interoperability is achieved through the use of High Speed ​​Medical Interoperability Resources (FHIR) and Health Level Seven International (HL7) standards. These standards allow the health care system to effectively exchange health data. For example, FHIR facilitates the exchange of patient records between electronic health records (EHR) systems, ensuring providers have access to up-to-date information. The HL7 standard allows for the seamless exchange of clinical data, including lab results, imaging data, and patient health history across a variety of systems. By leveraging interoperable systems, healthcare organizations can quickly access a patient's full medical history and enable informed decisions that improve patient outcomes.

Challenges and opportunities in the transition to interoperability

Interoperability offers immeasurable promises, but achieving it on a large scale is not without its challenges. A key hurdle is the lack of standardization throughout the healthcare system. Various EHRs and health information systems often use different data formats and standards to complicate data sharing. Healthcare organizations are committed to adopting FHIR and HL7 standards, but true interoperability requires collaboration between EHR vendors, payers, providers and policy makers.

Despite these challenges, interoperability offers important opportunities. If the system exchanges data seamlessly, it can avoid replicating tests, prevent errors, and ensure that patients receive the right care at the right time.

Conclusion: A future built on policy reform and interoperability

The healthcare industry is undergoing transformation. As VBC becomes more common, the pressure to reduce costs while improving results will be greater than ever. While rising healthcare costs and the complexity of care delivery pose challenges, policy reform and convergence of interoperability standards provide new opportunities to address these issues. By promoting reforms such as MACRA and CMS PA and supporting the adoption of interoperability standards such as FHIR and HL7, we can create more efficient, cost-effective, patient-centric health care systems.

This article was co-written with CEO and co-founder Amber Nigam, a member of the Forbes Business Council.

Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology executives. Are you qualified?



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