Four key problems with current value-based program design: How might we achieve better results?

March 22, 2021 / By L. Gordon Moore, MD

If we want better health care outcomes in the U.S., we need to change the way we finance health care. Policies flowing from Medicare are a strong signal to the health care system given its size. The Medicare Quality Payment Program (QPP) is a very large value-based purchasing (VBP) program, so captures a lot of attention, but the program has some challenges that may hamstring the changes we need to get the outcomes we want.

Some health services researchers wrote an interesting viewpoint piece in JAMA.[1] One of the authors, Dr. Kenton Johnston, came on the 3M Inside Angle podcast to discuss what he and the other researchers see as flaws in the current CMS VBP and ways we might improve upon the model.

Dr. Johnston et al. describe four key problems with current VBP:

  • It fails to eliminate the perverse incentives in the Fee-for-Service model
  • The definition of value is overly narrow
  • It comes with a high administrative burden
  • Inadequate risk adjustment

Examples of success:

  • Accountable care organizations formed around clinician groups, not hospitals
  • Medicare Advantage (MA)
  • Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract (AQC)

From these examples, we might conclude that there is an easier pathway to reducing unnecessary hospitalizations when the group does not own a hospital, that policy flexibility in Massachusetts makes it easier to deploy resources according to needs, and the global performance targets in the AQC provided clarity on goals to providers.

Come listen to Dr. Johnston’s discussion of VBP and how we might improve the programs on the 3M Inside Angle podcast.

Dr. Gordon Moore is Senior Medical Director, Clinical Strategy and Value-based Care for 3M Health Information Systems.

[1] Johnston, Kenton J., Jason M. Hockenberry, and Karen E. Joynt Maddox. “Building a Better Clinician Value-Based Payment Program in Medicare.” JAMA 325, no. 2 (January 12, 2021): 129–30. https://doi.org/10.1001/jama.2020.22924.

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