Has value-based care reached a tipping point?
48 states have adopted some kind of pay-for-performance program that rewards outcomes, rather than the volume of care.
As various types of health care reform continue to be debated on the national level, states have continued to serve as policy laboratories—and according to a new study, nearly all states have adopted some kind of pay-for-performance program that rewards outcomes, rather than the volume of care.
The new report, Value-Based Care in America: State-by-State, was recently released by Change Healthcare, a health care IT company based in Nashville, Tennessee.
The study finds that 48 states have now implemented value-based care (VBC) programs. The move follows years of research showing that the old fee-for-service model of health care provides mixed incentives—often leading to more care and cost, rather than an emphasis on quality and prevention.
States are moving ahead with VBC
“Value-based care programs are flourishing across the U.S., with a seven-fold increase in the number of states implementing such initiatives in the past five years,” the company said in a release. The report also includes a state-by-state analysis of VBC programs in 50 states, along with the District of Columbia and Puerto Rica. Only four states: Georgia, Indiana, Mississippi, and West Virginia do not currently have statewide VBC programs.
And the rise of programs implementing VBC programs has been dramatic: in 2006, only one state had a VBC program, according to the report. Between then and now, the use of VBC approaches have grown steadily, with most of the growth happening after 2014, when there were just 16 states with VBC programs.
The report says three states—New York, Pennsylvania, and Vermont—are leading the way with a broad scope of initiatives and strategies, including payment models that involve shared risk.
“Much of the public’s attention is focused on the federal government’s role in catalyzing health care payment reform, but the significant work being done at the state level is no less important and meaningful,” said Carolyn Wukitch, senior vice president and general manager of Network and Financial Management at Change Healthcare. “Based on the report, it’s obvious that managed Medicaid programs are actively exploring numerous value-based payment models, and that states are implementing more advanced strategies around healthcare payment transformation will ultimately drive the commercial markets.”
The experiments with VBC programs have taken a number of different approaches. Eighteen states have implemented Comprehensive Primary Care Plus (CPC+), a medical home model that is promoted by the Centers of Medicare and Medicaid Services (CMS). A number of states have adopted Medicaid Accountable Care Organizations (ACOs), which the report descries as “Groups of doctors, hospitals, and other health care providers that voluntarily coordinate their services to provide high-quality care to their patients.”
In many states, episodic care management has been the focus of VBC programs, this model uses bundled payments to provide quality care for patients with specific conditions over a defined period of time.
Challenges still exist
The new report shows the progress that VBC and pay-for-performance approaches have made, but many in the industry say VBC initiatives still have a ways to go. Change Healthcare itself released a survey recently that found VBC arrangements are facing challenges in the areas of care coordination and technology.
“We have a very fragmented health care system. This makes it difficult for patients to navigate through the various treatment options and payment requirements,” said David Gallegos, senior vice president of consulting services for Change Healthcare in a March interview with FierceHealthcare. “Having a more connected healthcare system would significantly improve the patient experience.”
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