The U.S. needs to accelerate the shift from healthcare payments based on volume to payments based on value to better align stakeholder incentives and penalties with cost, quality, and health outcomes. Promoting value-based care is the best way to slow or reverse the trajectory of healthcare costs and improve care. By changing the focus from volume to value and redefining financial incentives toward reduced costs, greater efficiencies, better health outcomes, and more person-centered care, the system would reward positive effects—including preventive care and improved management of diseases and conditions with fewer complications—and discourage unnecessary and potentially harmful care.
This is not an entirely new approach. In fact, Congress has indicated the intent to move away from paying for volume, and create incentives to improve quality of care starting with the Medicare Modernization Act of 2003, the Affordable Care Act (ACA) of 2010 and the Medicare Access and CHIP Reauthorization Act of (MACRA) 2015. The ACA included the bold step of creating the Centers for Medicare & Medicaid Innovation (CMMI), and provided it significant funding to test models that would expand and strengthen the use of value-based payment. Those efforts have recently slowed. Accelerating the return to testing value-based payment models as rapidly as possible—and expanding their application—is an important step in creating a more efficient and effective healthcare system
The U.S. must continue investing in value-based and alternative payment models to gather a better understanding of which models drive down healthcare costs, which models improve quality of care, and which models do both. We must encourage the Department of Health and Human Services to accelerate efforts to test models that will transform payment. The U.S. should also invest in the research necessary to learn as quickly as possible from the models that are being tested. This includes unveiling Medicare and private sector payer data to evaluate these models and the organizational changes that make them successful, integrating quality measures into decision support systems, and learning how to adapt designs to the context in which these models are deployed.
Stakeholders should begin scaling models that work, and build enough flexibility so the models can be adapted to be successful across communities and healthcare settings. This involves creating mechanisms to learn from high-performing systems and creating training programs for providers and healthcare executives, as well as collaborative opportunities to share best practices. In transforming the delivery of healthcare, providers and systems must have a seat at the table to determine how best to become efficient producers of valued care, with approaches that work in their systems and communities.
All transitions of this nature incur costs and face resistance. That’s why the U.S. must develop and deploy effective incentives and policies that reduce the burden of these necessary changes, and facilitate the movement of patients, providers and health systems from fee-for-service payment systems to value-based care models.
Three common sense reforms – allowing Medicare to directly negotiate prescription drug prices with drug companies, accelerating the move to a value-based care system and requiring greater price transparency – are key to lowering healthcare costs and improving health outcomes. West Health, a family of nonprofit and nonpartisan organizations that spans research, policy and philanthropy, will convene major figures from the worlds of healthcare, business, policy and media for a national summit on how to best drive these reforms to create a system that is more transparent, competitive, affordable, person-centered, quality-driven and sustainable.
The rising cost of healthcare is a growing and major threat to our economy, our financial security and our individual health. For too long, we’ve been paying too much and not getting enough in return. The U.S. healthcare system is on an unsustainable cost trajectory. We have an urgent need to address this cost crisis so that healthcare can become more accessible and more affordable for all Americans. Now is the time.
West Health provides a variety of published reports, findings and data, as well as resources that are free and available for use.