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The Fundamentals of Value-Based Health Care

fundamentals health reform multidisciplinary teams value-based health care Feb 21, 2023

Value-based health care is a global movement that has its origins in the United States and is now being adopted by over 30 countries.  

It’s a response to decades of rising health care delivery costs, spiralling rates of chronic disease, changing community expectations and a desire to shift towards incentivising health practitioners based on positive care outcomes rather than volume of patients being seen.


What is Value-based Health Care?

Value-based health care is a healthcare delivery model that prioritises the quality of care over the quantity of services provided. The goal of value-based health care is to improve patient outcomes while reducing costs, by focusing on the needs and preferences of the patient and ensuring that every medical intervention is evidence-based and necessary.

The 'value' in value-based health care is created when a patient's health outcomes improve.


Five ways Value-based health care is different to how you deliver care now:

Typically, value-based health care delivery has these five leading characteristics which make it different from how care is delivered in most practices currently:

1. Reimbursement for value, not service

In traditional fee-for-service healthcare, healthcare providers are paid for each service they provide, regardless of the outcome. This often leads to the overuse of medical services, and in some cases, unnecessary procedures and treatments. With value-based health care, healthcare providers are reimbursed based on the value they provide to patients, rather than the volume of services they perform. This results in a more patient-centric approach to care, where providers focus on delivering the right care, at the right time, and in the right place.

2. Use of integrated data and analytics to drive decision making

One of the key principles of value-based health care is the use of data and analytics to drive decision-making and measure success. It uses patient-reported experience and outcome measures (known as PREMs and PROMs), combined with clinical outcomes and cost data to track progress and identify areas for improvement. By using data and analytics, value-based health care aims to provide a more personalised approach to healthcare, where patients receive treatments and interventions that are tailored to their unique needs and preferences.

3. Personalised care journeys

Rather than a one-size-fits-all healthcare experience, value-based health care uses segmentation, data and analytics to group patients by like needs and provide more personalised care journeys. Patients in each segment receive treatments, interventions and experiences that are tailored to the unique needs of your patients and their conditions

4. Multidisciplinary teams and collaboration
Another key aspect of value-based health care is the use of multidisciplinary teams and collaboration. With value-based health care, healthcare providers work together across multiple specialties to provide the most effective and efficient care for patients. This often involves the use of technology and data, to help providers make informed decisions about patient care, and to share information and insights with other members of the care team.

5. Patient education and engagement

Value-based health care also prioritises patient engagement and education and encourages patients to take an active role in their own care. Patients are encouraged to ask questions, understand their options, and make informed decisions about their care. This helps to build trust and improve patient outcomes, as patients are more likely to adhere to their treatment plans and follow through with recommended care.


Is Australia adopting a Value-based Health Care model?

Australia is in the early stages of adopting a value-based health care delivery model. The Philips 2021 Future Health Index indicated that only 13% of health care leaders here in Australia considered themselves well into their change journey towards value-based health care.

Momentum is definitely beginning to build however, with a number of major reform documents being released since 2020 which point to a future state where health care providers will be reimbursed for value and a shift to centring on delivering outcomes that matter to patients.

The strongest reform signal yet came in February 2023 with the release of the Strengthening Medicare Taskforce Report outlining the requirement to adopt a value-based care approach across all areas of the health sector in Australia in order to address the most pressing investments needed in primary care.


Value-based health care is transforming the way healthcare is delivered across the world and providing patients with the high-quality, evidence-based care they deserve. There is no doubt that change is coming to the Australian health care system and health care professionals will need to adapt to ensure their practice remains relevant and viable.

Further Learning:

Ready to learn more about partnering with your patients and discover how your practice can evolve to be more value-based in its approach? Take our introductory Fundamentals of PX course online now. 

For further details on why value-based health care delivery will become important to your practice in the near future, watch our free Kickstarter webinar - Australian Health Reform: What it means for you and your practice here.


Further Reading:

Blog: The Fundamentals of Patient-Reported Measures.

Blog: The five reasons why you need to move beyond being patient-centred.

Blog: The Fundamentals of Multidisciplinary Teams.

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