THE CENTERS FOR MEDICARE & MEDICAID SERVICES (CMS) ANNOUNCED that by 2030, all Medicare beneficiaries will be in care relationships that use quality of care as a basis for reimbursement. Most Medicaid beneficiaries also are expected to be enrolled in value-based programs by 2030. 

In addition, private insurance companies are increasingly using quality of care as a basis for payments. 

Under quality-based programs, payments to doctors, hospitals and other providers go up or down based on quality measures, including patient outcomes, infection rates, patient satisfaction, cost-effectiveness, health equity and well-being of the health care workforce. 

Methods of delivery 

CMS sponsors multiple programs for value-based care. The most common are Accountable Care Organizations (ACOs), including the Medicare Shared Savings Program by which the government pays or withholds bonuses based on quality measures. 

Every two years, the AMA surveys the participation of physicians in ACOs and other payment systems. Although fee-for-service is still the dominant type of payment, the participation by physicians in ACOs grew from 44% in 2016 to 57.8% in 2022. 

Payment methods used by government and private insurers include “episode-based” and “bundled” payments by which providers receive a single payment for all services for a particular medical issue. Such payments were authorized under the Affordable Care Act. To the extent services can be delivered in a cost-effective manner, the reimbursements will be more profitable. 

For example, within an ACO, a hospital, physicians, nurse practitioners and physical therapists may coordinate care for patients who have had joint arthroplasty surgeries. Studies have shown that well-coordinated care can reduce length of stay, readmissions and post-acute care.

Elements of effective programs 

An effective value-based reimbursement program requires multiple elements: 

Benchmarks. High-quality, evidence-based benchmarks serve as a foundation for value-based reimbursement systems. 

Information systems. Robust information technology tracks data regarding benchmarks for individual patients and for the system as a whole. It is important to make the system user-friendly for providers, administrators and patients. 

Close coordination. A key aspect of efficiency and saving costs is close cooperation between providers, including primary care physicians, specialists, nurses, therapists, social workers, pharmacists and dieticians. The goal is to have a culture of teamwork and avoid siloed mentalities. Coordination can promote more prompt services and avoid duplicate or unnecessary services. 

Emphasis on prevention. In a communication to patients, the Cleveland Clinic announced, “We’re looking to make health care proactive instead of reactive, preventing problems before they start.” Screenings, vaccinations and other preventive care can save time and costs as well as improve outcomes—for example, managing a patient with diabetes before the patient experiences kidney failure. 

Engaging patients. Clear, supportive communication with patients helps motivate patients to improve their health. Communication may encompass guidance on medications, diet, exercise and cessation of smoking. Good communication also may boost scores on patient satisfaction surveys. 

Promoting health equities. Some value-based programs include measures and incentives to promote health equities for underserved populations. The equities may encompass what are referred to as “the social determinants of health.” For example, if patients have difficulty with transportation, the health care facility may provide telehealth, home care or transportation for health care visits. An additional holistic approach is for health care facilities to provide—or make referrals for organizations that provide—assistance with housing, food or employment. 

Well-being of workforce. Another factor sometimes used in value-based reimbursement programs is well-being of the workforce. The issue has become more prominent with the increase in stress and burnout of health care workers. Measurements regarding this factor include staff turnover and responses to surveys. Staff development and reduction of paperwork also can impact well-being. •