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Four keys to success for value-based payment reform

For many people, the first time they heard about “value-based” payment is with the passage of the “doc fix” bill, which averts a 21-percent cut in Medicare payments to doctors while at the same time moving future reimbursement to pay-for-performance and away from traditional fee-for-service medicine. But for the last four years, a team of researchers from the University of Washington has been evaluating seven value-based payment reform pilot programs (funded by the Robert Wood Johnson Foundation) in six states – Washington, Oregon, Pennsylvania, Maine, New Hampshire and Massachusetts – to identify keys to their success, barriers discovered along the way and lessons to inform policymakers and practitioners.

Keys to success

Several factors were found to be key to the success of programs that gained traction. They include:

  1. Strong leadership
  2. Sustained market pressure
  3. Publicly accessible data infrastructure
  4. Provider-payer collaboration

Barriers to implementation

Meanwhile, certain features were found to be barriers to implementing value-based payment reform:

  • Lack of sustained engagement of major purchasers.
  • Administrative obstacles, such as problems implementing consistent claims assessments across health plans.
  • Competing priorities among diverse stakeholders.

Lessons for policymakers and practitioners

Researchers determined four key lessons meant to inform policymakers and practitioners.

  • Organized health care purchasers should demand health plans and providers move to value-driven payment.
  • Multi-stakeholder, public-private coalitions of providers, employers, health plans and others are best positioned to develop consensus standards for measuring quality, outcomes and cost; those efforts should be their focus. Researchers cited the Washington Health Alliance and the Maine Health Management Coalition Foundation as examples.
  • Strong anti-trust vigilance and appropriate regulation are critical to ensure health plan and payer competition in the public interest.
  • Public transparency of health plans’ prices and provider organizations’ quality metrics is a key ingredient in the menu of public policy options.

Based on this research, the Alliance’s role as a broad, multi-stakeholder collaborative committed to ongoing transparency makes us well suited to usher in a new era of value-based payment reform.

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Published: May 6, 2015

About Washington Health Alliance

The Washington Health Alliance is a place where stakeholders work collaboratively to transform Washington state’s health care system for the better. The Alliance brings together organizations that share a commitment to drive change in our health care system by offering a forum for critical conversation and aligned efforts by stakeholders: purchasers, providers, health plans, consumers and other health care partners. The Alliance believes strongly in transparency and offers trusted and credible reporting of progress on measures of health care quality and value. The Alliance is a nonpartisan 501(c)(3) nonprofit with more than 185 member organizations. A cornerstone of the Alliance's work is the Community Checkup, a report to the public comparing the performance of medical groups, hospitals and health plans and offering a community-level view on important measures of health care quality (www.wacommunitycheckup.org).

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