By Eric Andrew Kristof, RN, CAHIMS | Healthcare IT Professional | HIMSS Arkansas Chapter Member
About This Series: The HIMSS Word of the Day is a running blog series drawing from the HIMSS Dictionary of Health Information and Technology Terms, Acronyms, and Organizations, 6th Edition (2025) — the authoritative reference for healthcare IT professionals and the primary study resource for CAHIMS and CPHIMS certification. Each post paraphrases the term in plain language, grounds it in real-world healthcare IT context, and adds a bedside nursing perspective you won’t find in a textbook.
📖 The Term: Value-Based Care (VBC)
Source: HIMSS Dictionary of Health Information and Technology Terms, Acronyms, and Organizations, 6th Edition (2025)
🔍 Plain-Language Definition
Value-based care (VBC) is a way of organizing and paying for healthcare in which hospitals, physicians, and other providers are rewarded for the results their patients achieve rather than for the number of services they perform.
The HIMSS Dictionary describes VBC as a delivery model that pays providers based on patient health outcomes, rewarding them for helping patients get healthier, reducing the burden and incidence of chronic disease, and following the evidence. It contrasts VBC with fee-for-service, where payment rises with every visit, test, and procedure. In the dictionary’s framing, “value” means the health outcomes achieved relative to what it costs to achieve them, the same idea Harvard’s Michael Porter popularized as outcomes per dollar spent.
Value-based payment is not one model but a spectrum. The Health Care Payment Learning & Action Network (HCP-LAN) groups payment approaches into four categories:
| HCP-LAN Category | How Providers Are Paid | Examples |
|---|---|---|
| Category 1: Fee-for-Service, No Link to Quality | Payment for each service, regardless of quality or outcome | Traditional fee-for-service |
| Category 2: Fee-for-Service Linked to Quality | Fee-for-service with bonuses or penalties tied to reporting or performance | Pay-for-reporting, pay-for-performance programs |
| Category 3: Alternative Payment Models on a Fee-for-Service Base | Fee-for-service claims, with shared savings and sometimes shared losses against a spending target | Shared savings ACOs, bundled payments |
| Category 4: Population-Based Payment | A set payment for a defined population or condition, with providers responsible for total cost and quality | Capitation, global budgets |
⚠️ Exam Alert: Value-based care is the goal; specific payment models are the mechanisms. Distinguish fee-for-service (paid per service), pay-for-performance (fee-for-service plus quality incentives), shared savings (the model behind most ACOs), and capitation (a fixed payment per person per period). Know that MACRA created the Quality Payment Program, with its two tracks: MIPS and Advanced Alternative Payment Models.
🌐 Why It Matters: Real-World Healthcare IT Context
Value-based care has been a central direction of U.S. health policy for more than a decade. The Affordable Care Act created the Medicare Shared Savings Program and the CMS Innovation Center. MACRA, enacted in 2015, replaced the old physician payment formula with the Quality Payment Program. On the hospital side, CMS runs value-based programs such as Hospital Value-Based Purchasing and the Hospital Readmissions Reduction Program. In 2021, the CMS Innovation Center set a goal of having every person with Original Medicare in an accountable care relationship by 2030.
Every one of those programs depends on health IT. Providers cannot manage a population’s total cost and outcomes without knowing who their patients are, who is at highest risk, what care they are missing, and what is happening to them outside the four walls of the hospital.
That last point is where interoperability and value-based care meet. An organization accountable for a patient’s total cost needs to learn about the emergency visit at another hospital, the skilled nursing stay, and the specialist referral across town. Health information exchange, event notifications, and claims data from payers fill those gaps. Without them, care managers are working from an incomplete picture, and the organization is taking financial risk on care it cannot see.
Equity is part of the design challenge as well. If payment models do not adjust for the social and clinical complexity of the patients a provider serves, organizations caring for the sickest and most disadvantaged populations can look like poor performers, so risk adjustment and social needs data matter as much as clinical measures.
Health IT capabilities value-based care requires:
- Patient attribution, so organizations know which patients they are accountable for
- Risk stratification that identifies patients who need proactive outreach
- Care gap reports for preventive and chronic disease measures
- Admission, discharge, and transfer notifications from hospitals and emergency departments
- Electronic clinical quality measure reporting built from structured EHR data
- Social determinants of health screening and referral tracking
Where value-based programs struggle:
- Measures that reward documentation more than real improvement in outcomes
- Data gaps when patients receive care outside the organization’s network
- Administrative complexity across many payers with different models and measures
- Upfront investment in care management staff and analytics before savings appear
- Risk of avoiding complex patients if risk adjustment is weak
🏥 The Nurse’s Perspective: Clinical, Bedside, & Workflow
In value-based care, much of what drives outcomes and cost is nursing work.
At the Bedside
Preventing a fall, a pressure injury, a catheter-associated infection, or a medication error avoids harm and avoids cost. Thorough discharge teaching, accurate medication reconciliation, and a scheduled follow-up appointment reduce the chance a patient returns within 30 days. Under fee-for-service, a readmission generates another bill. Under value-based care, it counts against the organization.
That shift makes visible what nurses have always known: the quality of nursing care is a financial factor, not just a clinical one.
In Clinical Workflow
Value-based organizations rely on nurse care managers, transitional care nurses, and chronic care management programs. These nurses call patients after discharge, track high-risk populations, close care gaps, and coordinate with primary care, specialists, home health, and community resources.
Their tools are informatics tools: registries, risk scores, outreach worklists, and shared care plans. Many of the quality measures that determine shared savings come straight from nursing documentation, such as depression screening, fall risk assessment, tobacco cessation counseling, and vaccination status.
In EHR Implementation (Go-Live Perspective)
During Epic implementations in organizations with value-based contracts, population health tools, registries, care management workflows, and quality measure build are often part of the scope. Build decisions about which fields are required, where screenings appear, and how care gaps display determine whether quality measures can be met without adding unnecessary work.
End-user support analysts frequently hear the question behind the build: why a field is required, or why a screening prompt appears at every visit. The honest answer is often a quality measure tied to a payment contract, and explaining that connection helps clinicians see the purpose behind the click.
🎓 CAHIMS / CPHIMS & HIMSS Perspective
CAHIMS Exam Domain Mapping
Value-based care appears across the CAHIMS exam’s policy and informatics content:
| CAHIMS Domain | How Value-Based Care Appears |
|---|---|
| Healthcare & Technology Environments | MACRA and the Quality Payment Program; MSSP and ACO models; CMS hospital value-based programs; payment model types |
| Clinical Informatics | Quality measures from clinical documentation; care coordination workflows; risk stratification and registries |
| Healthcare Information & Systems Management | Data warehousing and analytics; eCQM reporting; event notifications; data exchange across partners |
| Management & Leadership | Strategy for transitioning from volume to value; financial risk; care management staffing |
Key Terms to Know Alongside Value-Based Care
- Fee-for-Service (FFS) — payment for each service delivered, independent of outcomes
- Accountable Care Organization (ACO) — a group of providers accountable for the quality and total cost of care for a defined population
- Alternative Payment Model (APM) — a payment approach that adds incentives for quality and cost efficiency
- Capitation — a fixed payment per person per period, regardless of how many services are used
- MIPS (Merit-based Incentive Payment System) — the Quality Payment Program track that adjusts Medicare payments based on performance
- Population Health Management — the systematic effort to improve outcomes for a defined group of patients
HIMSS Organizational Position
HIMSS supports the shift to value-based care through its public policy engagement on payment and quality programs, its maturity models for analytics and continuity of care, and Global Health Conference programming. Members can find population health and value-based care research through the HIMSS Resource Center.
🔗 Explore Further: External References
- CMS Innovation Center — Value-Based Care https://www.cms.gov/priorities/innovation/key-concepts/value-based-care
- CMS — Value-Based Programs https://www.cms.gov/medicare/quality/value-based-programs
- CMS — Quality Payment Program https://qpp.cms.gov/
- Health Care Payment Learning & Action Network — APM Framework https://hcp-lan.org/apm-framework/
- CMS — Medicare Shared Savings Program https://www.cms.gov/medicare/payment/shared-savings-program
- Porter ME. What Is Value in Health Care? New England Journal of Medicine, 2010 https://pubmed.ncbi.nlm.nih.gov/21142528/
Term source: HIMSS Dictionary of Health Information and Technology Terms, Acronyms, and Organizations, 6th Edition (2025). All definitions in this series are paraphrased for editorial purposes. Readers are encouraged to consult the primary source for exact language.
Eric Andrew Kristof, RN, CAHIMS is a Healthcare IT professional and HIMSS Arkansas Chapter member based in Hot Springs Village, AR, with hands-on Epic Go-Live experience and a diverse healthcare and IT background. He writes at kristof.org at the intersection of clinical care and healthcare technology.
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