New Guidelines Seek to Advance Value-Based Payment Reform in Health Care

Change would give providers more flexibility in providing care

DURHAM, N.C. – New guidelines provide the U.S. health system with a roadmap for shifting faster toward a system that rewards providers based on patient health outcomes rather than the number of services provided.

The Duke-Margolis Center for Health Policy and West Health issued the two strategic roadmaps last week with recommendations for advancing the value-based payment reform.

Instead of paying for each individual service provided, value-based payment models use arrangements like small upfront payments for each patient or a lump-sum payment for a particular treatment (i.e., the birth of a child or a knee replacement) -- allowing providers more flexibility to determine the best way to provide care to a patient.

Organizations can receive additional payments for achieving certain outcomes or improving quality, and can share the savings they achieve.

“Many health systems leading the response to COVID-19 are succeeding in part because of their participation in payment models that have allowed them to build the infrastructure and capabilities necessary to deliver patient-centered, high-value care,” said Mark McClellan, director of Duke-Margolis, who previously served as administrator of the Centers for Medicare & Medicaid Services and commissioner of the U.S. Food and Drug Administration.

“Identifying and disseminating best practices from these organizations is crucial for ensuring that our health care system can act effectively, both at this critical time and in the future.”

Implementing value-based care and payment models has become a cornerstone for reform efforts seeking to lower skyrocketing health care costs and improve the quality of care. However, widespread adoption of value-based payment models has been slower than expected; most care is still driven by fee-for-service payment, and existing programs have produced only modest cost savings.

The roadmaps from Duke-Margolis and West Health will serve as the centerpiece of a three-year education, training and research initiative aimed at accelerating the shift from volume- to value-driven care, both nationwide and through state-specific efforts.

The initiative also will target research on issues like COVID-19, applying insights from key payment and delivery reforms to help improve the health system’s response.       

The state and national roadmaps provide guidance on implementing value-based payment models through the reduction or elimination of low-value care, improved patient engagement and alignment of payment reforms across multiple providers.

The guidelines also address how new models can expand access to payment reform for specialty care providers and to improve treatment of seriously ill patients.

The effort’s ultimate goal is to reduce hurdles to the expansion of reasonably priced, high-quality care.
“Despite significant progress and interest in value-based payment reform, policy and procedural barriers remain at both the state and national levels,” said Timothy A. Lash, president of the West Health Policy Center and chief strategy officer of the nonprofit West Health, a family of organizations focused on lowering health care costs to enable seniors to successfully age in place.

“Our three-year initiative with Duke-Margolis will help address these barriers and provide a way forward that could lead to better health for millions of people and a significant reduction in the cost of care.”

Click here to download “A Roadmap to Accelerate National Value-Based Payment Reform: Filling in the Missing Pieces” and “A Roadmap for Effective State Leadership in Value-Based Payment Reform.”