Q: I keep hearing about value-based health care. What is it?

A: Value-based care is industry jargon, but the phrase describes something important happening in health care: a new focus on prioritizing (and paying for) quality instead of just quantity. The U.S. health-care system is the most expensive in the world, and Philadelphia is among the highest-cost regions. Yet our health outcomes continue to lag other countries. Value-based health care is about getting better results at a lower cost. Doctors call this the “triple aim”: better care, lower costs, and happier, healthier patients. Value-based care strives to improve all three.

Why do we spend so much and not have better results?

A lot of our spending is wasteful. A recent study estimated that about 25% of health-care spending is unnecessary. When you consider that the U.S. spends $3.8 trillion on health care every year, that 25% adds up: $760 to $935 billion of waste. Unnecessary spending includes avoidable hospitalizations, unneeded tests, and overuse of branded drugs instead of generics. These expenses do not improve outcomes and, in many cases, make them worse. Value-based care pulls us in a new direction, where we pay for the outcome – the good result – instead of the inputs.

How do you get better outcomes and lower costs at the same time?

We can improve outcomes and lower costs by getting patients the right care, at the right time, in the right place. That approach to health care requires a coordinated team effort: Doctors, nurses, pharmacists and other providers must be able to work in harmony, and patients must feel empowered to participate actively in their care. This process starts with primary-care physicians (PCPs). Your PCP is uniquely positioned to get to know you, to understand your values and help guide you through the best ways to get – or stay – healthy. Patients who are more engaged with their PCP have better outcomes, and physician-led organizations consistently outperform others in delivering value-based care. By knocking down administrative barriers and giving PCPs and other team members the right tools and technology to coordinate their efforts, doctors can spend more time engaging with patients and providing better care. Payments are then tied to the positive patient outcomes produced by this approach.

Will patients feel any difference?

Value-based care isn’t about changing your doctor or your hospital. (Unless you want to.) It’s more of a fundamental shift in how we pay for health care. That does make a difference for patients. For one thing, better coordination and analytics in value-based models mean that we can focus health care on the whole picture rather than providing piecemeal treatments for different conditions. By tying payments to good outcomes rather than the number of services given, we start to chip away at unnecessary spending. And we reward doctors and providers for operating more efficiently and doing a better job of keeping you healthy. Done right, value-based health care should be a win-win-win: better care, lower costs, happier patients.

Tony Coletta is a board-certified general surgeon and the CEO of Tandigm Health, a value-based population health services organization in the Philadelphia region.