How the healthcare industry can build a foundation for value-based payment reform

stethoscope on money
The healthcare industry should look at three focus areas to build a strong foundation for payment reform, said Chip Kahn, president of the Federation of American Hospitals. (Getty/Maudib)

As the healthcare industry continues its transition away from a fee-for-service model, stakeholders should focus on three areas to create an effective platform for future value-based-care initiatives.

First, the industry must develop and adapt quality measures that actually matter, wrote Chip Kahn, president of the Federation of American Hospitals, for the group’s health policy blog. There are a few measures that do have merit, Kahn said, like efforts that reduce elective births and readmissions. The latter is flawed, but both have brought attention to areas that providers can improve and led to notable gains.

However, the healthcare industry does not have a process across the board for quality measures, and therein lies another issue, he said. Variability is often arbitrary and distracts from the ultimate goal of improving care.

“I believe if we truly focus on measures that matter we can bring a return on investment for patients, caregivers, payers and purchasers,” Kahn wrote.

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Kahn was among the presenters at a Health Affairs forum on the subject this week, attended by nearly 300 stakeholders from across the continuum of care. Speakers focused on current and developing payment models, like those formed under the Medicare Access and CHIP Reauthorization Act (MACRA), and better strategies to measure value in these models.

Return on investment (ROI), the second focus area, is a business buzz term, Kahn wrote, but it can be applied to measuring quality and value in healthcare as well. Measurements should have meaningful value to all stakeholders, and the reporting burden should be reduced to offer a better ROI on recording key data.

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Finally, measures should be aligned across payers for more meaningful reporting. This will free up time and resources to also improve ROI, Kahn wrote. Taking a hard look at these three focus areas allows for a foundation for wider payment reform, he said. Addressing these concerns will lead to more effective discussion on ways to refine and focus new payment models.