The goal of payment reform in healthcare is to increase value for both providers and patients. Value-based care, which focuses on quality, cost reduction, and patient outcomes over quantity of services provided, is becoming a more popular strategy for achieving this goal. However, in order to effectively implement value-based care systems that promote strategic value-enhancing activity and maximize overall healthcare efficiency, there must be meaningful changes made to the current payment models used within the industry. The following are some key policies that should be considered when designing any payment reform initiative:
1. Utilizing Alternative Payment Models (APMs): APMs provide incentives based on quality of care rather than volume or utilization measures. This helps encourage providers to focus on providing high-quality care while avoiding unnecessary treatments or procedures that do not add any real benefit for the patient. Examples of alternative payment models include pay for performance (P4P), bundled payments, capitation, shared savings agreements and medical homes. By shifting from fee-for-service (FFS) payments towards these APM options, providers can directly receive rewards for delivering superior outcomes as well as reducing costs associated with medical services provided.