Over the past decade, adoption of value-based payment (VBP) models has increased substantially. The Center for Medicare and Medicaid Innovation’s has launched multiple new models since its authorization, commercial payers have structured almost one-third of their payments as alternative payment models (APMs), and state Medicaid programs have increasingly included payment reforms in their waivers and Medicaid managed care contracts.
Nevertheless, questions remain on how payment and care reforms can best reduce overall costs and improve quality, outcomes, and people’s experience of care. Overall evidence on cost and quality outcomes of the diverse reforms to date is mixed, with some payment models performing better than others. A recent assessment from the Centers for Medicare and Medicaid Services (CMS) has also raised questions about the impact of many of the pilot reforms implemented by the Center for Medicare and Medicaid Innovation (CMMI) during its first decade.
Despite these challenges, interest in payment reform and pressure to engage in reform continue to increase. The experience of COVID-19 has reinforced strong interest in VBP, given the limited ability of fee-for-service payment to support providers during the pandemic. COVID-19 will likely drive down health care spending for 2020 because patients decided to delay or forgo usual care, especially prevention-oriented care. This in turn may contribute to additional worsening of health outcomes, and the need to build on the shift to home-based and virtual care. Continuation of emergency telehealth and site-of-service waivers can continue to provide incremental support for these shifts, but bigger reforms are needed to support home-based services like remote monitoring, digital apps, and coordination with community care teams that are hard to sustain under fee-for-service payment.
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Senior Research Director, Health Care Transformation
Adjunct Associate Professor
Senior Team Member
Margolis Core Faculty
Director of Margolis Center
Robert J. Margolis, MD, Professor of Business, Medicine and Policy
Margolis Executive Core Faculty