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Report Evaluates Future of Value-Based Care

February 18, 2021

A new report from the University of Pennsylvania reviewed a decade-long effort to transform health care, while offering a roadmap for the future that pays “for value and reduced health disparities, rather than high volumes of services.”

The report and accompanying policy brief from the Leonard Davis Institute of Health Economics and the Healthcare Transformation Institute provide an overview of payment reform, as well as recommendations for the Biden Administration to accelerate and complete the nation’s transformation to value-based payment. 

“The 2020s require a new strategy that moves from a short-term focus on testing new payment models to a long-term focus on expanding models that are most likely to generate substantial savings and improve quality,” the report notes.

The white paper, The Future of Value-Based Payment: A Road Map to 2030, identifies the shortcomings of recent efforts to shift “from volume to value.” It also provides key strategies to the Centers for Medicare & Medicaid Services (CMS) to expand models most likely to generate savings, improve quality, and reduce health disparities, such as:

  • Articulating a clear vision for the future of value-based payment, while aligning publicly financed health care
  • Dramatically simplifying the current value-based payment landscape and engaging late-adopting providers
  • Accelerating the movement from upside-only shared savings to risk-bearing, population-based alternative payment models—while curtailing the ability of providers to opt out of value-based payment altogether
  • Structuring incentives to push providers away from fee-for-service (FFS) payment
  • Achieving health equity is a central feature and goal of value-based payment

Value-based payment has been a key strategy to manage the pace of increasing costs and improve quality since the passage of the Affordable Care Act (ACA) during 2010. However, efforts to shift from volume to value using advanced alternative payment models (APM) have fallen behind the goals set by the federal government.

During 2015, former U.S. Human Services Secretary Sylvia Burwell committed to tying at least half of traditional Medicare FFS payments to flow through APMs by 2018. The white paper notes that only about 40 percent of those payments flowed through APMs, according to the most recently available data.

HAP continues to monitor the development of new health care models and supports approaches that reward hospitals for delivering outstanding care. For additional information, contact Kate Slatt, HAP’s vice president, innovative payment and care delivery.