The shift to value-based care payments

By Ilene MacDonald

Image removed.One healthcare leader who hit the mark was Nicholas Tejeda (right), then-CEO of Doctors Hospital of Manteca (California). Tejeda, who's now the CEO at Sierra Providence East Medical Center in El Paso, Texas, told us he thought the shift from fee-for-service to fee-for-value would be a big focus area in 2015.

He was right.

A few weeks after we ran our 2015 preview story, the federal government announced it would speed up plans to move way from volume to value in Medicare payments. The Centers for Medicare & Medicaid Services plans to tie 30 percent of all fee-for service payments to providers to quality initiatives through alternative models by 2016. By March, the White House administration created a public-private collaboration called the Health Care Payment Learning and Action Network to help facilitate the implementation of new models of payment and care delivery.

The shift to value-based care requires a complete change in culture, one that requires leaders to maintain a consistent vision, develop interpersonal relationships and a strategy for living a shared set of principles.

So far leaders haven't made much progress. A September report from PwC's Health Research Institute found that many healthcare executives are taking a wait-and-see attitude to determine which value-based models are most successful before they take on the risk.

And an October report from the Government Accountability Office found Medicare's value-based purchasing program hasn't led to substantial improvements in care during its first three years. Meanwhile, many of the original Pioneer accountable care organizations (ACOS) have left the program due to high quality scores but disappointing financial performance, a move that has some experts worried the model is unsustainable.

But others are more hopeful that Medicare's new model introduced this year, the Next Generation ACO, which asks participants to take on more financial risk with the potential to obtain a greater reward--is a positive step that will propel the industry toward a value-based payment system. 

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The shift to value-based care payments