Moving to Value-Based Care

The U.S. needs to accelerate the shift from healthcare payments based on volume to payments based on value to better align stakeholder incentives and penalties with cost, quality, and health outcomes.

Promoting value-based care is the best way to slow or reverse the trajectory of healthcare costs and improve care. By changing the focus from volume to value and redefining financial incentives toward reduced costs, greater efficiencies, better health outcomes, and more person-centered care, the system would reward positive effects—including preventive care and improved management of diseases and conditions with fewer complications—and discourage unnecessary and potentially harmful care.

This is not an entirely new approach. In fact, Congress has indicated the intent to move away from paying for volume, and create incentives to improve quality of care starting with the Medicare Modernization Act of 2003, the Affordable Care Act (ACA) of 2010 and the Medicare Access and CHIP Reauthorization Act of (MACRA) 2015. The ACA included the bold step of creating the Centers for Medicare & Medicaid Innovation (CMMI), and provided it significant funding to test models that would expand and strengthen the use of value-based payment. Those efforts have recently slowed. Accelerating the return to testing value-based payment models as rapidly as possible—and expanding their application—is an important step in creating a more efficient and effective healthcare system.