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Value-Based Purchasing: Time for Reboot or Time to Move on?

These are difficult days for those of us who have advocated for pay-for-performance (P4P) as a policy tool to improve health care quality. The idea behind P4P has always been simple: physicians and hospitals should be financially rewarded for providing high-quality care and financially penalized for providing low-quality care. Although this idea has been around for some time, it gained national traction over the past decade, as policy makers pushed toward paying for “value” and not just volume.

What began as experiments with P4P in the early 2000s became a major policy focus with the passage of the Affordable Care Act (ACA). Six years after the ACA’s passage, the evidence on P4P in general is largely mixed, and the evidence on Hospital Value-Based Purchasing (VBP), the national hospital P4P program, is discouraging.

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