3 factors in highly effective value-based payment programs

U.S. healthcare providers made progress with value-based payment reform initiatives, but they lack the appropriate levels of urgency to move the industry toward patient-centered global payments based on quality, according to a Health Affairs blog post.

Hospital adoption of value-based care is on the rise, with more organizations planning to make the transition in the near future, FierceHealthcare previously reported, driven in large part by the Department of Health and Human Services' announcement that it will tie 30 percent of Medicare payments to alternative payment models by 2016.

Researchers, led by Douglas Conrad of the University of Washington, analyzed seven value-based payment reform programs funded by the Robert Wood Johnson Foundation (RWJF) in six states. They found several factors in common in programs where value-based payment gained steam, including:

Strong leadership from an organization that can broker competing interests: For example, the Pittsburgh for Regional Health Initiative's value-based payment strategy incorporates an accountable care network (ACN) of seven hospitals with an eye toward bundled payments as a way of strengthening chronic condition management. The first hospital to join the initiative focused on care coordination and cut readmissions among patients with chronic obstructive pulmonary disease 44 percent. Since then, the Center for Medicare and Medicaid Innovation has awarded the initiative $10.4 million for its ACN.

Endured market pressure from organized purchasers: In Washington, pressure from the state Health Care Authority and major employers belonging to the Washington Health Alliance drove the Washington Multi-Payer Patient Centered Medical Home Reimbursement Pilot to drastically reduce avoidable hospitalizations and emergency room visits between May 2011 and December 2013.

Provider-payer collaboration: Blue Cross Blue Shield of Massachusetts has been part of the Alternative Quality Contract for the past four years; this arrangement, which is not RWJF-funded, has generated net savings and demonstrates the potential for payer-provider partnerships, which are increasingly in demand post-Affordable Care Act.

However, the research also found numerous obstacles to value-based payment reform, including: lack of sustained engagement among major purchasers, such as unions and consumer groups; administrative barriers, such as problems implementing consistent claims assessments across health plans in Boston; and conflicting priorities in arrangements with stakeholders from diverse sectors and backgrounds.

To learn more:
- read the Health Affairs blog post