Paying for outcomes has so far saved money on people who are already sick, not by keeping people from getting sick. In a decade of Medicare payment pilots the savings were modest and came from short surgical episodes and from fewer hospital and post-acute stays; none came from disease made less common.

backsValue in Healthcare: Laying the Foundation for Health System Transformation, World Economic Forum, in collaboration with The Boston Consulting Group

When it is easier to define discrete episodes of care (e.g. surgeries, such as knee or hip replacements), value-based bundling will be the model of choice.

qualifiesThe Future of Value-Based Payment: A Road Map to 2030, Rachel M. Werner, Ezekiel Emanuel, Hoangmai H. Pham, Amol S. Navathe

While models targeting high-cost populations (e.g., those with end-stage renal disease) have generated the most savings, some evidence suggests that this is attributable to risk selection and regression to the mean.

groundsThe Future of Value-Based Payment: A Road Map to 2030, Rachel M. Werner, Ezekiel Emanuel, Hoangmai H. Pham, Amol S. Navathe

With a small number of exceptions, value-based payment has yet to improve (or even explicitly address) access to care or health outcomes

qualifiesSource document

Among fee-for-service Medicare beneficiaries discharged after heart failure hospitalizations, implementation of the HRRP was temporally associated with a reduction in 30-day and 1-year readmissions but an increase in 30-day and 1-year mortality.

qualifiesSource document

Our study findings are also supported by a recent report from the Medicare Payment Advisory Commission, a nonpartisan federal agency, which also found no association between the HRRP and patient mortality with any of 3 conditions targeted in the program.

backsThe Future of Value-Based Payment: A Road Map to 2030, Rachel M. Werner, Ezekiel Emanuel, Hoangmai H. Pham, Amol S. Navathe

Bundled payment models have produced modest per-episode savings for surgical procedures, most notably lower extremity joint replacements. Bundled payments have produced smaller savings for select medical conditions, such as congestive heart failure, and no savings for other conditions, such as cancer and acute myocardial infarctions.

groundsThe Future of Value-Based Payment: A Road Map to 2030, Rachel M. Werner, Ezekiel Emanuel, Hoangmai H. Pham, Amol S. Navathe

Population-based ACOs have generated modest per-beneficiary savings, with improvements along several quality dimensions. Evaluations suggest that physician-led ACOs have produced greater savings than hospitalled ACOs by reducing hospitalizations, and these savings increase the longer participants remain in the program. Hospital-led ACOs face conflicting incentives: lost admission revenues wipe out the shared savings earned through reducing hospitalizations. Therefore, hospital-led ACOs have focused on reducing post-acute care spending. While models targeting high-cost populations (e.g., those with end-stage renal disease) have generated the most savings, some evidence suggests that this is attributable to risk selection and regression to the mean.

groundsThe Future of Value-Based Payment: A Road Map to 2030, Rachel M. Werner, Ezekiel Emanuel, Hoangmai H. Pham, Amol S. Navathe

Successful value-based payment transitions take time; the savings and practice transformations from APMs take years of experience and investment to pay off.