The Future Of Value-Based Payment—Time To Reexamine And Refocus Our Efforts

Great strides have been made over the years in the care of Medicare beneficiaries by focusing on and implementing quality performance measurement and hospital value-based payment systems. However, the laws and regulations that drive these efforts have not been revisited since their inception, and it is time for reexamination. Changes and adjustments should be made to ensure that the programs continue to advance better and more efficient care across the health care delivery system.

Examining The Goals Of Value-Based Payment

There remains a broad-based understanding that quality improvement, transparency, and accountability are now accepted across the spectrum of health care stakeholders and that tying the three to payment is an established objective of both the public and private sectors.

But value-based programs cannot remain static and still drive quality improvement. So how does Medicare learn from the current programs to remain focused on improving patient care while maintaining relevance for clinicians and hospitals that are ever-improving their metrics and health care delivery?

These issues were discussed at a recent Health Affairs forum entitled “Securing the Future of Value-Based Payment.” The event built on the growing evidence that our current efforts aren’t working as designed, a topic of much debate across the quality/performance measurement communities. For example, value-based payment advocate, Ashish Jha, director of Harvard Global Health Institute, recently asked a key question—“Value-Based Purchasing: Time for Reboot or Time to Move On?”

After decades of the quality measures discussion and implementation in Medicare and other programs, I believe the answer to Jha’s question is—it’s time for a reevaluation and a reboot.

If we strictly adhere to the current path, Medicare performance measurement could become an exercise in mandated compliance instead of actual performance improvement. Now is the time for stakeholders across the health care sector—from patients to providers to payers to regulators—to pause, reexamine, and refocus our efforts. The refocus begins with targeting measurement to capture what matters most, minimizing burden, and adapting to a transforming delivery system that strives to clinically integrate care.

Reengineering For Meaningful Reporting And Payment

Ongoing evaluation is the starting point for future success, and the current state of quality measurement and paying for value needs improved measure design and selection, reduced burden, and aligned incentives through payment policies. For example, in measure design and selection, appropriate risk adjustment is needed, including adjusting for sociodemographic factors, to ensure providers aren’t inappropriately penalized for conditions and demographic effects their patients bring into the patient-provider relationship.

Consumers are frustrated with currently available measures, particularly the lack of measures that address patients’ most pressing concerns about treatment outcomes, such as mortality, complications, and functional ability. And, use of paper-based instead of electronic health record–based measures drawn directly from workflow, as well as the lack of alignment between hospital and clinician quality measurement and reporting, creates a burden. The latter leads to duplicative—or sometimes even conflicting—efforts.

These concerns are especially timely given the developing implementation of the Medicare Access and CHIP Reauthorization Act, which aims to pay for clinicians’ Medicare services based on value. Providers believe payment policies focus on the wrong priorities (for example, penalizing hospital readmissions far more than penalizing mortality) and are unable to adapt the federal payment system as we continue to refine quality measurement through new sources of data and improved analytics.

Finding Solutions

At the Health Affairs forum, experts confirmed the validity of these concerns and agreed that they must be addressed for us to continue the national march toward value. But how do we as a nation get there constructively, balancing the needs of the various stakeholders? I believe that the solution can be found by focusing on three areas—measures that matter, return on investment (ROI), and meaningful reporting—supported by creating a sustainable, inclusive platform to align the needs of stakeholders.

Measures that matter are those that focus on meeting the mission of improved care, increased accountability and transparency, and meaningful, actionable information aimed at greater efficiency—both quality and value—in health care. Our current methods of measure design and selection reveal that our system doesn’t focus enough on the measures and incentives that really move the needle on patient care and value to the system. Within our current measures, we do have some examples to build from and pursue, such as measures that have resulted in the reduction of elective delivery of infants before 39 weeks. But other measures are simply exercises in compliance instead of affecting real change. The same can be said of our pay-for-value programs, such as hospital acquired conditions, hospital readmissions reduction, and hospital value-based purchasing. While some elements of these programs may be driving positive improvements, others may be moving us in the wrong direction with perverse incentives or compliance-based efforts instead of improvement-based efforts.

ROI is a classic business notion, but instead of thinking of it as a purely financial metric of earnings relative to investment, here I use it to include both quantitative and qualitative returns. At its most basic, ROI in quality measurement boils down to ensuring that the resulting improvement efforts across the health care system are greater than the time and resources that stakeholders contribute to collecting, reporting, analyzing, and acting on the data. Health care providers currently feel as though their efforts are greater than the returns—a negative ROI. To ensure improved outcomes and buy-in from stakeholders, we must reverse this ratio to generate a positive ROI. But, I want to be clear that a positive ROI does not mean eliminating burden entirely; rather, it means ensuring data collection and reporting actually result in meaningful care improvement and efficiencies where available, such as facilitating useful electronic clinical quality measures and streamlined reporting.

The last area, meaningful reporting, is the alignment of measures across payers. As we heard at the Health Affairs forum, there is growing consensus that our current quality measurement system and value-based payment programs are too siloed to hold real meaning for providers, payers, and patients alike. There is currently a lack of meaningful reporting and meaningful alignment across pay-for-value programs. I believe that focusing on this alignment going forward can help ensure consistent use of measures that matter, reduce data collection and reporting burden, and free up resources for care givers to innovate on patient-centered care delivery.

Envisioning The Future For Public And Private Programs

Our currently ill-focused quality measurement and pay-for-value structures are holding us back. We need to break down barriers—vertical and horizontal. This can be done by creating a platform to convene stakeholders, maintain focus on the areas discussed above, and address the variation within the health care system among payers, care givers, and emerging innovative and integrated delivery systems.

I believe the National Quality Forum’s Measure Applications Partnership (MAP) is a good starting point for such an endeavor, as it already includes many key attributes necessary for success. As a congressionally sanctioned, well-functioning, highly motivated, multistakeholder, transparent, private/public partnership that is driven by consensus, the MAP already has six years of experience working closely with the Centers for Medicare and Medicaid Services (CMS) to determine measures for use in federal programs, such as Medicare and Medicaid. The platform I envision here would extend beyond these federal programs to seek buy-in from and work across all public and private programs and payers.

It is clear that quality measurement and value-based payment are here to stay and are being embraced by our health care system. That is a welcome change from a few years ago, but it’s not enough. I posit that our current path does not align with our goals, and now is the time to pause and reevaluate our measurement and value-based programs. Taking our experience with measurement, reporting, and pay-for-value programs thus far, we need to engage in the hard work of determining which elements of these programs move us closer to our quality and cost goals and improve our ROI. Only those elements that move us in the right direction should remain and then be aligned to the extent possible across payers and providers. I believe this begins to answer the important question raised at the forum by Health Affairs editor-in-chief Alan Weil—“What are the goals, and how do we achieve them?”

The logical next step in this effort is to acknowledge the need for collaboration across the continuum—payers, patients, providers, regulators—and to develop a platform for moving forward. The goals and platforms outlined here can serve as the basis for that journey, and I look forward to continuing to build momentum toward a more purposeful, sustainable value-based payment system.

Hopefully, as this process takes off, policy makers at CMS and in Congress will see the need for mid-course corrections in the Medicare value-based programs they have assigned to hospitals and clinicians. It is time to re-orient these programs to reflect what caregivers and patients alike need to ensure that the care Americans receive reflects the standards we deserve and expect. To achieve that end will take a carefully honed process. The forum showed it is needed; now is the time to begin.

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