"Value-Based Care" has a great ring to it, but today's healthcare pricing method – charging by the procedure rather than by the outcome – can seem driven by anything but value.

Charging for healthcare procedures a la carte means that plenty of mistakes and unneeded services are mixed into the final bill – to the tune of $395 billion annually.

One meta-study indicates that Inpatient Prospective Payment Systems (IPPS) may be a more affordable alternative. With IPPS (an umbrella term for a number of existing payments systems), patients pay for an outcome, be it relief from chronic pain or the restoration of mobility to an injured finger.

The healthcare provider has to choose the most effective treatment path. If costs fall beneath the price paid, the provider makes a profit; if costs exceed payment, the provider takes a loss. Some states like Texas and Minnesota are already creating new legislation which incorporates similar strategies, and some industry players call for widespread adoption of this new shape for patient billing.

Read full article at RevCycle Intelligence.