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How Would Value-Based Care Change Workers' Compensation?There is an ongoing debate in the workers’ compensation insurance industry about whether more insurers should adopt a value-based care model for paying claims. VBC proponents in the industry cite the potential to provide treatment that is more effective in cost and outcome for the patient. How would a VBC system change workers’ compensation for claimants? It may benefit them in theory, but there are still questions about how the system would actually work.

Value-Based Care vs. Fee for Service

Workers’ compensation insurers use a fee-for-service payment model, in which the insurer pays the healthcare provider for each visit or procedure that it performs. Critics of fee for service say that it puts a greater incentive on the number of visits than the quality of care provided. A VBC payment system compensates healthcare providers based on the nature of the injury and the recovery of the patient. There are several payment models for VBC, including:

  • Pay for performance;
  • Bundled payments; and
  • Outcomes-based payments.

VBC proponents call this a more holistic and patient-centered approach to workers’ compensation. The doctor’s financial incentive is to help a worker reach maximum recovery as soon as possible, which could result in injured employees returning to work more quickly. Of course, insurers could also benefit from more predictable pricing and shorter periods of disability payments.

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