Two topics dominate almost every conversation about value-based care (VBC): risk adjustment and quality. They are, without question, foundational. Risk adjustment sets the financial baseline for each patient population, while quality metrics confirm we are delivering the right preventive and chronic-care services. Yet there is a third pillar that too often escapes the spotlight, even though it can detract dramatically from organizational performance: utilization.
Why utilization trails its flashier siblings
In value-based care, utilization is the total mix of services a patient receives — how often they use them, where they’re delivered, and at what cost. When patients receive a clinically appropriate service in a lower-cost setting (e.g., an ambulatory surgery center instead of a hospital outpatient department), we say utilization is “optimized.” When they receive duplicative tests, avoidable ER visits, or expensive site-of-service upgrades, utilization becomes a hidden revenue leak.
If utilization is so consequential, why does it lag behind risk coding and quality reporting in mind-share and investment? One reason is visibility. Clinicians lack a clear window into where their patients go for care, what services were rendered, and — crucially — how much those services cost.
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