Value-Based Care: The Movement

The Medicare Access and CHIP Reauthorization Act (MACRA) was passed to modernize physician payment, reforming the way physicians are reimbursed and encouraging participation in advanced, value-based payment models.

Even with the certainty of MACRA, there continues to be uncertainty around the future of healthcare and government reform.

Numerous questions exist: Will we expand the value-based payment model movement? Will physician-led approaches dominate? Will payment models be turned over to the private sector?

Let’s break this down.

Privatization: Privatizing the payment reform movement is in line with Republican rhetoric about getting government out of the way and allowing for private sector innovation and consumer choice. This could be accomplished through expansion of Medicare Advantage, however the program has been slow to move away from traditional fee-for-service payment structures and today only covers one-third of Medicare beneficiaries nationwide. Bottom line: change is needed in the Medicare’s fee-for-service system in order for providers to avoid increasing costs and uncoordinated care, making Medicare Advantage an incomplete solution.

Physician-led approach: Physician-led approaches have demonstrated some early success in narrow episodes and models. If this approach dominates, we could see greater employment of physicians by health systems and more consolidation/ unification of physician practices. However, there is down-side risk of physician-led models avoiding caring for high-risk populations, which could lead to patients delaying care or using emergency rooms for ambulatory treatment.

Alternative payment models prevail: Continuation of payment models that support value-based care, is where we should place our bets. We think Republicans will expand the value-based, alternative payment models that providers have already significantly invested in. More importantly, alternative payment models have been proven to work. They’re saving Medicare millions of dollars while continuing to improve quality. In fact, Premier’s Medicare ACO members, which make up just 6 percent of the participants in the program, have realized 20 percent of the nearly $1.3 billion in savings the program has achieved. Imagine if every ACO performed like that.

Moving from fee-for-service to value-based payment models is the path our industry has been on for nearly 20 years and the path we should continue. In an industry where value is the economy and measurement is the currency, health systems need to continue creating care delivery and population-based models that are efficient and effective.

To learn more about how Premier can help you navigate the change visit www.premierinc.com/vbc.