September 30th, 2014
Today, Catalyst for Payment Reform (CPR) unveiled some potentially exciting news: Our 2014 National Scorecard on Payment Reform tells us 40 percent of commercial sector payments to doctors and hospitals now flow through value-oriented payment methods, defined as payment methods designed to improve quality and reduce waste. This is a dramatic increase since 2013 when the figure was just 11 percent.
Traditional fee-for-service, where we pay for every test and procedure regardless of its value, may rapidly be becoming a relic. While the Scorecard findings are not wholly representative of health plans across the United States, they are directionally sound and allow us to measure progress toward value-oriented payment in the commercial sector. (Scorecard findings are based on data representing almost 65 percent of commercial health plans across the country.)
On the face of it, this is thrilling news for CPR, especially since our organizational goal is that at least 20 percent of payments to doctors and hospitals will flow through methods proven to improve value by the year 2020. But we are not closing up shop just yet. The proliferation of value-based payment arrangements only matters if they succeed at reducing costs and improving the quality of care. And for many value-oriented payment models, we still don’t have the evidence.
We also remain a bit circumspect because only about half of the value-oriented payments (out of that 40 percent figure) put providers at some financial risk if they fail to improve care or spend over budget. To employers and others helping to foot the bill for health care, many new payment methods often feel like “cost plus arrangements.” Instead, purchasers would like to see risk sharing across payers and providers.Read the rest of this entry »