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June 22, 2020

Alternative Payment Models—Victims of Their Own Success?

Author Affiliations
  • 1Corporal Michael J. Crescenz VA Medical Center, Philadelphia, Pennsylvania
  • 2Department of Medical Ethics and Health Policy, Perelman School of Medicine, University of Pennsylvania, Philadelphia
  • 3Healthcare Transformation Institute, University of Pennsylvania, Philadelphia
JAMA. 2020;324(3):237-238. doi:10.1001/jama.2020.4133

The US health care system requires major changes to make health care more affordable and higher quality. In the decade since passage of the Patient Protection and Affordable Care Act (ACA), alternative payment models have become central to this effort. These models are designed to replace existing fee-for-service payments with a reimbursement structure that provides incentive for high-quality and cost-effective care—so-called value-based care. The Centers for Medicare & Medicaid Services has introduced several alternative payment models, each with a particular focus, such as Comprehensive Primary Care Plus for primary care and the oncology care model for patients with cancer.

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    2 Comments for this article
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    Bundles Moderating Medicare Costs or Contributing to a Cost Shift?
    Joel James, MA | Multi-Specialty Medical Group Practice
    These models may be be worth preserving but at what expense? Physicians will not continue to invest capital, resources, and labor into voluntary, Federal-run experiments whose policy rules change frequently. Any long-run planning is nearly impossible and incentives for participating evaporate the more successful you are at reducing cost. If V-B care as defined by CMS/CMMI is to be widely adopted I believe it will have to be mandatory. Also, the authors are basing their premise of the apparent impact on healthcare costs on the fact that the HC cost/GDP has leveled off at 18% - as have Medicare expenditures since ACA passage. But that’s only part of the story. Aside from the fact, which the authors recognize, that GDP registered historically strong growth since the great recession ended in 2010 (over 20%), when looking at personal consumption expenditures for healthcare that expenditure rise has been pretty much unabated through 2019. See eg https://fred.stlouisfed.org/series/DHLCRC1Q027SBEA

    Could this mean that Medicare VB care models have perhaps helped to stabilize the growth in Medicare expenditures (as the researchers contend) but costs have shifted more into commercial sector – contributing to the continuous rise on HC PCE? If so, what is really gained? – perhaps a possible slight moderation in cost growth in Medicare but a not-so insignificant cost shift to commercial, non-Medicare payers and patients.
    CONFLICT OF INTEREST: Employed by medical group which is also a BPCI-A participant and convener
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    Financial Barriers to Expensive Care
    Gordon Moore, MD | Harvard Medical School
    Am I missing something? Most Medicare Advantage members face steep first dollar costs, totalling thousands of dollars for hospital care. The levels of out-of-pocket cost exposure have been rising. Wouldn't these be a potential factor in flattening the cost curve?
    CONFLICT OF INTEREST: None Reported
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