As a health benefits consultant, I find the MidAtlantic Business Group on Health invaluable for two reasons; I establish relationships in a non-sales setting and I am exposed to advanced concepts and strategies that I can use for the benefit of my clients.
Pillar Three: Payment Reform
The third pillar of value-based purchasing is payment reform.
There are two critical aspects of payment reform:
- Differential reimbursement based on demonstrated performance;
- The need to redesign payment methodology to better align economic incentives with desired outcomes.
Both elements of payment reform are needed and complementary. Differential reimbursement or “pay for performance” as it is popularly known, reflects the principle, as in other segments of our economy, that payment rates should be aligned with performance. Differential reimbursement creates a powerful business case, now absent in the current system, for providers to produce high quality and efficient service.