Metrics for Transformation –
What is Value-Based Payment?
Value-Based Payment (VBP) is a strategy used by purchasers to promote quality and value of health care services. The goal of any VBP program is to shift from pure volume-based payment, as exemplified by fee-for-service payments to payments that are more closely related to outcomes. Examples of such payments include pay-for-performance programs that reward improvements in quality metrics; bundled payments that reduce avoidable complications; global trend rate targets that tie upside and downside payments to specific quality scorecards in addition to actual to target cost trend rate. All of these VBP programs have, as a common goal, to slow the increase in the total cost of care by encouraging a reduction in the reported 30% of wasted health care dollars. Research suggests that it is essential to move significantly away from FFS payments as the main source of payment in order to change the current incentives of overproduction of health care services.
While these programs have proliferated throughout the country, partially prompted by Medicare and further spurred by many private sector payers, the current estimates are that the volume of health care dollars paid under these VBP arrangements still account for less than 90% of all spend. Keeping track of this percentage is therefore a critical indicator of the progress in health care affordability.
What We Are Doing To Impact These Measures:
HCI3 is involved in helping the public and private sectors in developing and implementing a number of VBP solutions.
Public Sector –
HCI3 is working on a project led by Brandeis University, to develop an episode system for CMS. This “Grouper”, as it is referred to, will be used for several purposes by Medicare. First, it is intended to inform reports that CMS will issue to physicians everywhere in the country that examines their delivery of health care services, and compares that to their peers. As such, physicians would get a better sense of how many resources are used to manage similar patients and how that resource use consumption compares to what other physicians in other parts of the country are doing. There’s a lot of evidence and research demonstrating large variations in resource use by physicians, and that more resources are not linked to better outcomes. The second purpose is to inform the “Value Modifier”. That’s an index that will determine whether a physician is delivering more or less value compared to peers and would result in physicians getting more or less money depending on their value index in managing Medicare patients. Both of these uses of the “Grouper” are big steps in modifying the current anything goes payment used by CMS for the Medicare program.
Private Sector –
HCI3 works with health plans, employers and providers across the country to test, refine, and scale various value-based payment approaches. While much of our work is centered around bundled payments, we also work on pay-for-performance programs. And increasingly we’re researching how to link physician incentives to consumer incentives in order to align both at the point of care. In fact, we’re developing a comprehensive framework called the Improving Incentives framework in which we present the theoretical backbone for physician and consumer incentives, and guide payers, employers and providers to reduce the negative incentives that currently push good people to do bad things.
We’re also partnering with innovators to develop operational solutions that break down the current barriers to implementing value-based payment and value-based insurance design. Most health plan claims systems can only handle the most basic of transactions, and value-based payments require more sophisticated techniques. And the innovators we’re working with are developing these more sophisticated solutions.
Measures and Data Sources
Public Sector Initiatives
The measures for each of the 3 listed CMMI programs will include:
- Number (count) of participating providers/states;
- Number (count) of beneficiaries affected; and
- Percentage of beneficiaries affected: the count of beneficiaries covered by the specified initiative divided by total FFS Medicare beneficiaries (percentage assumes 35.9 million FFS Medicare beneficiaries as reported by Kaiser Family Foundation for 2006 (the latest year for which this information is available.) See http://facts.kff.org/chart.aspx?cb=58&sctn=169&ch=1800)
Data will be summarized as reported through the Centers for Medicare and Medicaid Innovation (CMMI) websites. Reported and updated periodically at: http://innovations.cms.gov/initiatives/ and more specifically:
- Pioneer ACO’s (http://innovations.cms.gov/initiatives/ACO/Pioneer/index.html)
- Shared Savings ACO (http://www.hhs.gov/news/press/2012pres/07/20120709a.html)
- Comprehensive Primary Care Initiative (http://innovations.cms.gov/initiatives/Comprehensive-Primary-Care-Initiative/index.html)
- Bundled Payment for Care Improvement (http://www.innovations.cms.gov/initiatives/bundled-payments/index.html)
Private Sector Initiatives
- Percentage of total in-network dollars paid through any bundled payment programs with quality of care components in the past year.
- Percent of total in-network dollars paid through fully capitated payments with quality of care components in the past year.
- Percent of total in-network dollars paid through partial or condition-specific capitation programs with quality components in the past year.
- Percent of total in-network dollars paid through shared risk programs with quality components in the past year.
- Percent of total in-network dollars paid through fee-for-service (FFS) based shared savings programs with quality components in the past year.
- Percent of total in-network dollars paid through non-FFS based shared savings programs with quality components in the past year.
- Percent of total in-network dollars paid through FFS plus Pay for Performance (P4P) programs in the past year.
- Percent of total dollars paid through other types of P4P incentive programs in the past year.
- Percent of total dollars paid through any “payment reform programs” in the past year.
The data source for the measures listed above is Catalyst for Payment Reform (CPR). CPR received grants from the Commonwealth Fund and the California HealthCare Foundation (CHCF) to support the development and implementation of a National Scorecard on Payment Reform. The Scorecard will be issued annually beginning in March 2013. The data is collected through a survey of health plans conducted in conjunction with the National Business Coalition on Health using the eValue8 Platform. Estimates of the number of patients affected by the various CPR scorecard initiatives should become available after March 2013. More detailed information regarding this effort and other CPR initiatives can be found at: http://www.catalyzepaymentreform.org/how-we-catalyze/national-scorecard