Incentive payment is critical for value-based purchasing

The rising cost of healthcare in the U.S. is a major concern. With historically low unemployment in an inflationary environment, the need to compete for top talent remains critical and impacts the health benefits packages that employers offer. 

While the focus is often on the scope of covered benefits, how that care is delivered is essential to its affordability and the clinical outcomes patients achieve. The adoption of value-based care and payment models is essential to improving the quality and affordability of care.

The move to value-based care models, however, requires commitment and investment from employers and other purchasers, as well as their advisers, insurers and providers, in both the private and public sectors. Extended care teams, focused care coordination, and meaningful data capture and sharing all require investment to drive success. 

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Therefore, it is critically important that Congress act immediately to extend the availability of the 5% bonus payment so that medical practices can continue to modernize and deliver better person-centered care. While the 5% incentive payment only affects Medicare business, this bonus has had a cascading impact such that commercial populations benefit from the fundamental change in the way physicians care for their patients. 

For doctors caring for Medicare beneficiaries, federal law currently provides for a 5% payment incentive if those physicians participate in an "advanced alternate payment model," a value-based care model in which providers are at financial risk for providing care designed to lower costs and improve quality for patients. That incentive is set to expire at the end of 2022, which could significantly slow progress for the value-based care movement as fewer providers are likely to participate in models that promise to make care more accountable and affordable for all patients and payers.

Earlier this fall, two national organizations representing hundreds of large employers and other healthcare purchasers renewed their call for value-based care in commercial insurance markets. Leaders from the Business Group on Health and Catalyst for Payment Reform set forth the imperative of reimagining healthcare. They recognize that while progress has been made on advancing value-based care in the last decade, these models should be more broadly available. This can only happen if the 5% incentive payment is extended, giving physicians and other clinicians the support they need to transform their practices.  

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Value-based care models are designed to align financial and other incentives to ensure patients receive the right care at the right time in the right setting. They make care more affordable for employees by reducing or eliminating co-payments for important preventive services while also minimizing low value or no value services.

Change is hard, but the switch to value-based care is worth it. Being at risk for financial and quality performance drives better aligned incentives for physicians and other clinicians to care for their patients most effectively and efficiently. 

The 5% incentive payment is an essential bridge away from volume-based care to value-based models. Over the past five years, many physicians and other clinicians have taken advantage of it to transform their medical practices not only for Medicare beneficiaries, but also for other populations, including the commercially insured. Even so, many physicians and other clinicians are still crossing the threshold to value-based care and the incentive payment is essential to get them over the line.   

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Everyone who gets, gives, and pays for care, including private employers and the people who receive their health insurance through work, should support the extension of the 5% incentive payment so that physicians can continue to properly invest in the cost-effective, high-quality healthcare system we all deserve.