The amount we spend on healthcare is material for jokes and horror stories. The horror stories are usually about people going into huge debt in order to get life-saving treatments or succumbing to health issues because treatments or healthcare were unaffordable. Meanwhile, people make light of heavy expenditure around medical treatment with quips like “Today being sick is a luxury” and “You need to be rich to afford to be sick”.

The gap in healthcare

Globally, people are dissatisfied with the pricing of healthcare and the quality of healthcare received. It has become common for people to have to take a battery of tests every time they have any symptoms, and undergo several permutations and combinations of treatment before a solution is arrived at, if at all. Meanwhile, the patient’s bills continue to mount, while the medical professional earns incrementally from the tests and treatments delivered.

In other words, the current unbundled pricing model incentivizes medical professionals based on the volume of treatment delivered, rather than incentivizing them for actually bettering the health of the patient.

For example, there are cases where the patient might have to replicate similar tests or tests that deliver similar information, because of a lack of coordination between medical professionals. Similarly, it might be possible for an accurate diagnosis to be arrived at, at a quicker pace, if medical professionals were incentivized to coordinate with one another to arrive at a solution cost-effectively and quickly.

A value-based healthcare system could help streamline the healthcare landscape and encourage more accountability among healthcare professionals.

What is value-based healthcare?

Value-based healthcare links pricing to patient-specific outcomes. The value of the treatment will be decided on the achievement of tangible outcomes such as the improvement in the patient’s quality of life and the speed at which such improvement occurs.

Patients would not have to pay unbundled fees and charges for various professionals, tests, and treatments but would rather pay a fixed fee linked to a fixed set of outcomes.

Since the patient pays one fee, medical professionals are encouraged to use technology and collaborate efficiently amongst one another in order to deliver outcomes. The focus shifts from the volume of treatment to quality of treatment; from adding to the number of tests and treatments to finding a solution that is cost and time-effective.

For the healthcare sector, the value-based model would call for a sea change in the way it fundamentally operates. Today the industry is very compartmentalized. You need to visit a doctor separately and a specialist on your own account, and shell out some more if you need surgery. And then you’ll have to pay a little more for your tests. The value-based model would centralize and decompartmentalize the way the healthcare sector works. Collaboration and data sharing will be the pillars of the new way of managing healthcare.

What will it look like?

Single point organizations – Data sharing is intended to encourage organizations to treat patients completely and with all historical data in hand. This includes not only treatment and clinical information but also insurance-linked details.

Bundled payments – At the very core of the value-based healthcare model is a single fee paid, which is then reimbursed to various doctors, specialists, consultants, etc

involved, rather than separate payments made to each.


The value-based healthcare system has the potential to usher in more affordable, more accountable, and more effective healthcare. By incentivizing health outcomes instead of the volume of treatment provided, this healthcare model of the future could be the answer to the common man’s woes around treatment costs and quality.