News and Highlights

July 2014

How Valuable is Value-Based Payment?

Andrew Ryan, PhD, MA
Dr. Andrew Ryan

In a recent Opinion piece in Annals of Internal Medicine, Andrew M. Ryan, PhD, MA, Associate Professor of Healthcare Research and Policy, and Matthew J. Press, MD, MSc, Assistant Professor of Healthcare Policy and Research and the Nanette Laitman Clinical Scholar in Quality of Care Research, discuss the implementation challenges of one of the incentive programs of the Patient Protection and Affordable Care Act: the Physician Value-Based Payment Modifier (PVBPM). The PVBPM is the first national value-based purchasing program for physicians in fee-for-service Medicare.

Matthew Press, MD, MSc
Dr. Matthew Press

“Physician practices have had some, but not extensive, experience with quality profiling and value-based payment programs,” say Dr. Ryan and Dr. Press. “In contrast, most U.S. hospitals publicly reported measures of quality for nearly a decade before Medicare’s Hospital Value-Based Purchasing Program began. Practices that lack experience with value-based payment may be resistant to the PVBPM and may not have the infrastructure needed to respond to financial incentives for value.”

Also, concerns have been raised about how accountability for patients’ care quality and cost is assigned. For example, a practice that provides most of a patient’s primary care will be responsible for specialist costs incurred from outside of the practice, but patients sometimes see specialists to whom they were not directly referred by their primary care providers.

Drs. Ryan and Press also point out that there may be unintended long-term consequences if incentives ramp up over time. “Some physicians may opt out of Medicare completely or be compelled to consolidate with larger health systems,” they note. “This consolidation could lead to higher quality and more integrated care but could also increase prices in the private market.”

“The ideal in value-based payment is to create a single set of performance measures that spans care settings for which a single group of providers shares accountability for the health of a populations,” say the authors. “The next best option is for the CMS to closely align performance measures across different settings.”


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