3 traits of good value-based payment programs

In order for value-based payment models to live up to their hype, they must generate more consistent benefits than they have so far, argue Jessica Farmer and Michael Hochman, M.D., of the Keck School of Medicine.

Writing in MedPage Today, the authors cited “lackluster” data backing up the benefits of value-based reimbursement plans to date as a need for policymakers to focus their efforts on identifying and developing the traits that make successful programs work.

“Unless we acknowledge the shortcomings of existing approaches and modify course, value-based reimbursement is unlikely to effectuate the healthcare delivery system transformation many policymakers anticipate,” they warn.

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The healthcare industry’s shift toward replacing payment models that reward providers for the volume of services they provide got a sharp boost from the release of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) final rule in late 2016, which codified the federal government’s transition to value-based care.

Despite uncertainty surrounding healthcare reform, industry experts have predicted the move toward value-based care will continue under the Trump administration, as healthcare leaders have advocated.

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Aside from a handful of high-profile success stories, Farmer and Hochman see a mixed bag of evidence that value-based payment strategies improve patient outcomes. They admit part of the issue may be the range of programs encompassed by the broad, value-based rubric and further, that demonstrating results may depend on finding the right metric.

The authors identify a set of traits common among successful programs that they believe distinguishes them:

  1. Comprehensive programs appear to work more effectively than simple ones, since they force organizations to focus on a wider variety of metrics.
  2. Successful models engage clinicians, which the authors suggest is better done by setting incentives at an organizational level, rather than an individual level.
  3. Markets with “a single dominant third-party payer” have tended to see more success than markets with a more complex mix of payers.

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