Current State of Value-Based Purchasing Programs

The US healthcare system is rapidly moving toward rewarding value. Recent legislation, such as the Affordable Care Act and the Medicare Access and CHIP Reauthorization Act, solidified the role of value-based payment in Medicare. Many private insurers are following Medicare’s lead. Much of the policy attention has been on programs such as accountable care organizations and bundled payments; yet, value-based purchasing (VBP) or pay-for-performance, defined as providers being paid fee-for-service with payment adjustments up or down based on value metrics, remains a core element of value payment in Medicare Access and CHIP Reauthorization Act and will likely remain so for the foreseeable future. This review article summarizes the current state of VBP programs and provides analysis of the strengths, weaknesses, and opportunities for the future. Multiple inpatient and outpatient VBP programs have been implemented and evaluated; the impact of those programs has been marginal. Opportunities to enhance the performance of VBP programs include improving the quality measurement science, strengthening both the size and design of incentives, reducing health disparities, establishing broad outcome measurement, choosing appropriate comparison targets, and determining the optimal role of VBP relative to alternative payment models. VBP programs will play a significant role in healthcare delivery for years to come, and they serve as an opportunity for providers to build the infrastructure needed for value-oriented care.

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