Home » Blog Articles » Bundled Payments » The Growth of Tech-Based Healthcare and New Payment Models

There are a number of new factors that are changing the healthcare environment for medical offices and healthcare facilities. The growth of tech-based healthcare companies and new payment models are trends that billing departments, healthcare facilities and CFOs need to monitor.

The Growing Influence of Tech-based Companies in Healthcare:

In recent years, tech-based companies better known for internet applications, software and smartphones, have grown their share of the healthcare marketplace. Google, Apple, Microsoft, Facebook and Amazon all have a presence in some parts of the medical field.

With the expansion of technology-based based healthcare, the growth of these companies in the healthcare sector made sense. These companies are better able to provide solutions for clinic informatics, data security and even utilize blockchain technology

For example, health systems have started using digital voice assistants which are manufactured by tech giants like Amazon, Google, Apple as well as Microsoft. Voice assistant devices and applications are increasingly used to check medication regimens, order food or request medical advice. These devices, like Amazon’s Alexa, are expanding their functionality and healthcare role.

Amazon’s device is now HIPAA compliant and has fully joined the world of medical software. Amazon’s Alexa is now used by patients to help manage their healthcare. These voice-activated devices are becoming virtual additions to medical teams. Health systems can use these devices for many things such as alert caregivers about a health problem or monitor patient-staff interactions. However, there are data security fears to consider.

The Mayo Clinic is transitioning its electronic health records to Google Cloud. By using Google’s technology, the Minnesota-based health system hopes that they are able to leverage artificial intelligence (AI) and other cloud computing technologies to solve complex health care problems. A goal is to create new machine learning models for healthcare that will improve treatment precision and clinical outcomes. They will be able to review anonymous medical records at much faster rates. However, health officials have stated that Google will never have access to actual patient data.

The Movement to Value-Based Payment Models:

For many years, insurance payers and healthcare providers have heard conversations about the switch from fee-for-service care to value-based care models. Value-based measurements are seen as an alternative to the well-established fee-for-service reimbursement model.

A major goal of fee-for-service models is to create a metric or outcome that is based on quality rather than quantity. Value-base models link provider reimbursement to the quality of care provided. The model rewards healthcare professionals and hospitals that provide measurable efficiency and effectiveness.

This is different from the more well-known, traditional fee-for-service payment model. This model reimburses medical providers based on the services they delivered to patients. The cost of these services is generated from already established charge amounts or a fee schedule.

The Centers for Medicare & Medicaid Services (CMS) has introduced payment structures that are designed as value-based care models. The CMS states that value-based payment models reward health care professionals with incentive-base payments. These incentives are derived from what Medicare determines to be “quality care” that patients receive from their medical professional.

Medicare & Medicaid advocate that the overall goal is to change how healthcare is delivered and reimbursed. This means paying providers based on the quality of delivered care, rather than the quantity of care that was delivered to patients. However, there are elements in the health care system that create challenges for any payment or reimbursement model.

When attempting to improve the quality of people’s healthcare, researchers should answer three fundamental questions.

[1] What is the quality of healthcare that is delivered to patients (quality)?

[2] How easily can patents gain access to needed healthcare services (access)?

[3] How expensive is it to deliver healthcare services (cost)?

Health care industry observers have noted that there is a give and take between quality, access and cost. It is often difficult to make improvements in all three elements at the same time. For example, if the cost of healthcare is reduced, it is often challenging to simultaneously expand access and improve the delivery of healthcare services.

Yet, this is the goal of bundled payment programs. Bundled payment models seek to control healthcare expenses while at the same time creating better final health outcomes for patients. Bundled payments emphasize high-quality, coordinated care that rewards participating healthcare providers for exceeding these standards metrics.

In 2015, roughly 23 percent of healthcare payments were connected to a bundled payment structure. But, by 2017, the number of payments tied to a value-based care model was 34 percent.

Government payers like the CMS are continuing to control cost by encouraging the development of a competitive healthcare environment. Other CMS policies that are encouraging this change is the price transparency rule and push for interoperability requirements.

Changes in Healthcare:

Over the last few decades, healthcare has seen some tremendous changes. This story will continue to develop as the healthcare marketplace continues to move to control medical costs. The goal of optimizing healthcare delivery by using technology to save time and money will continue to attract many tech-based companies. New technological inventions can quickly restructure the playing field and create efficiencies that previously did not exist.

It is likely that over the next decade, the healthcare system in the United States will continue to experience significant changes. Information technology, demographic trends and financial pressures will likely create a healthcare marketplace that is digital and competitive.


Advanced Billing & Consulting Services provides revenue cycle management services for a variety of healthcare specialties. Beyond medical billing services, ABCS also provides credentialing, online marketing as well as workforce management tools for agencies that deliver services to the I-DD community.

For additional questions about this topic or medical billing in general, please contact them.

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Fee for Service, Value-Based, Payment Models, Tech-based Companies