Changing How We Pay for Health Care: Value-Based Reform

Dr. Jack Cochran and Charles Kenney wrote an article on The U.S. Department of Health and Human Services’ recent announcement to move the Medicare program toward value-based payments.

Posted today in The Health Care Blog and originating from a February post on the Kaiser Permanente blog, the authors noted that this effort "is among the most promising recent developments in health care. While changing the way we pay for care will not be easy, we believe that shifting away from fee-for-service to value-based payments could be a catalyst to a better, more affordable health care system in our country."

Also included was an excerpt from NBCH's Value-based Purchasing Guide.

According to the National Business Coalition on Health, a nonprofit organization of “purchaser-led health care coalitions … dedicated to value-based purchasing of health care services through the collective action of public and private purchasers,” the impact would be significant. The coalition takes this position:

 As the business community has learned over the past several decades, maintaining workforce health and preventing illness – particularly chronic conditions – improves productivity and competitiveness, and can lower health care costs over time.

Value-based purchasing can help shift the paradigm of why employers offer health benefits from seeing it as an employee recruitment and retention tool, to seeing it as a chance to improve population health and increase productivity, and ultimately the employer’s bottom line.

The authors concluded that this may be the tipping point in our nation’s complex, often difficult, health care journey. What do you think?

NEW CPR Action Brief

Most of us would like to revamp the way we pay doctors and hospitals entirely. But changing payment won’t happen overnight. In fact, while we work to innovate with new forms of payment, we will be living with the existing payment system, including fee-for-service (FFS), for quite some time. So, it pays to ask: “How can we improve it?”

Today, Catalyst for Payment Reform (CPR) released an action brief on reforms that seek to counter some of the perverse incentives rooted in our current approaches to payment. While these reforms are less far-reaching than bundled or global payment, they can reduce costs and increase value in the short term. Read more...