Module 6

Question 1

What are the 3 reasons we focus on provider reform in the quest for value based healthcare?

Answer 1

1. Providers respond to financial incentives
2. Predominant provider payment methods contribute to deficiencies
3. New opportunities for linking payment to value

Alternative payment models are developed to steer from volume to value

Question 2

What are the 4 dimensions of value (as a multidimensional concept)?

Answer 2

1. High-quality care
2. Cost
3. Coordination
4. Prevention

Question 3

What are the 2 components of VBP?

Answer 3

1. Substantial base payment: population based payment = global payment -> giving a budget to HC providers for the care of a group of patients
2. Small variable payment that rewards measurable aspects of value (like quality)

Question 4

What are the characteristics of an ideal population based payment? Describe them.

Answer 4

1. A single payment to a multidisciplinary provider group.
   Why? To stimulate well-coordinated care:
   - holds groups accountable for spending and quality
   - central role of primary care physician
   - one single payment -> removes financial barriers
2. Covers a comprehensive care package that goes beyond single conditions.
   Why? To stimulate coordination and prevention:
   - care packages stretch beyond single services (whole-person accountability)
   - prevention is more effective and less expensive than a cure
   - attribution of population based on region
3. Is fixed for a defined period of time
   Why? To stimulate cost-conscious behavior:
   - budget vs actual spending in HC
   - more financial risk
4. Is adjusted for the risk profile of the target population.
   Why? To prevent strategic provider behavior that may thwart value:
   - 3 purposes of risk adjusting
   1. prevents cherry picking and
   lemon dropping
   2. fairness in payment allocation
   3. providers focus fully in
   optimizing value
5. Includes additional risk-mitigating measures for hc providers.
   Why? To prevent strategic provider behavior that may thwart value:
   - protect providers against excessive financial risk (insurance and systematic risk)

Question 5

Name and describe the 3 sources of complexity in the design and implementation of VBP models.

Answer 5

1. Choice overload - no “one size fits all”
   - define care package
   - delineate and attribute
   - setting the budget/spending target
   - define qualifying criteria
2. Barriers to sharing information
   - data systems: often these differ and are not compatible with each other
   - attitude: lack of open culture within hospitals
3. Quality of relationships and trust
   - good relationships and mutual trust are important preconditions to success