Report Outlines Roadmap for Continued Support of Value-Based Payment Models

Laura Joszt

As the United States innovates its healthcare delivery system with features like case management and telehealth, it runs into the challenge of payment innovations that have not kept pace. A new primer from the Council of Accountable Physician Practice (CAPP) outlines a roadmap to transition from a fee-for-service system to one that pays for value. The primer is the third in the Implementing Health System Improvement series.

The report suggests ways policy makers can advance value-based payments even as most attention is focused on changes to insurance coverage.

“Value-based payment systems hold providers accountable for improving people’s health, not simply doing more procedures,” CAPP Chairman Stephen Parodi, MD, associate executive director, The Permanente Medical Group, said in a statement. “Value-based payment lets us step back and look at patterns of care over time, so that we can change our processes to improve quality and efficiency. It allows us to achieve true innovative solutions for delivering care that is coordinated, cutting edge, convenient, and most importantly, producing ever better health outcomes.”

In presenting lessons learned from value-based payments, the primer identifies the challenges associated bundled payments and accountable care organizations (ACOs).

For example, while bundled payments encourage providers to manage episodes in the most efficient way, they should only be used for patients requiring well-defined, time-limited episodes of care or procedures. In contrast, bundled payments “are not an ideal payment mechanism for care that is both complex and ongoing,” the report noted.

In comparison to bundled payments, ACOs incentivize providers to meet budget and quality targets for whole populations, which makes them more appropriate for caring for patients with chronic disease. ACOs have their own issues.

“While we see great potential in these models, we have been challenged by several issues, including patient attribution methods, data lags, and, in some cases, unrealistic financial models using historic cost trends that ultimately penalize us for previous inefficiencies,” according to the report.

With the acknowledgement of the opportunities and challenges in value-based payment models, the primer offers several recommendations for policy makers to continue supporting value-based payment programs:
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