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10-year status report on rewarding provider performance

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The editors at Health Affairs write that they “were reminded just what a busy year 2006 was for health policy writ large (in addition to wondering ‘Has it been that long already?’). {One big event was the Massachusetts healthcare law, which became something of a model for crafters of the Affordable Care Act.} Now a decade later, we think there’s something to be gained from looking back on the impact and reach of some of the most significant policies implemented that year. With that in mind, Health Affairs Blog invited a handful of policy makers and researchers to reflect on some of these major milestones, share lessons learned, and discuss how our world has changed since then.

One observer was famed health-policy expert Gail R. Wilensky, whose essay concludes:

“There is still much that needs to be done to transform Medicare payments into a value-based system but the changes that are being made or tried are at least directionally correct. A decade from now we should be able to look back at how far we’ve come in adopting a value-based health care system.”

Among her other remarks:

“CMS has also adopted a number of value-based programs, many of which were part of the Affordable Care Act (ACA) legislation. Four were part of an initial set: the hospital value-based purchasing program, hospital readmission reduction program, the physician value-based modifier, and the hospital-acquired condition program. In addition, the Centers for Medicare and Medicaid Services (CMS) has added an end-stage renal disease quality initiative, a skilled nursing facility value-based program, and a home health value-based program.”

“The challenge for all of these value-based programs is whether they can change behavior when the base payment still dominates the total payment. For example, under the hospital value-based purchasing program, which was structured to be revenue-neutral and was originally implemented in 2013, hospitals will be receiving payment in fiscal year 2016 based on performance from 2014. What is more, the maximum penalty is limited to 1.75 percent of Medicare payments and bonuses will be limited to a maximum of approximately 3 percent. Some 3,000 hospitals are receiving penalties or bonuses for 2016 and according to a Government Accountability Office (GAO) report, they amount to less than 0.5 percent of applicable Medicare payment. Not surprisingly, interviews from hospital officials indicated that the program reinforced ongoing quality improvement efforts but didn’t result in any major changes in focus.”

To read her whole essay, please hit this link.

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