If you don’t follow health care too closely you might not be aware that over the last ten years or so there has been a huge effort to implement what is loosely referred to as “value-based purchasing”, which generally means paying health care providers for the outcomes they achieve, not just for doing something. Medicare, Medicaid and commercial payers have all jumped on the bandwagon. One thing this does for sure is raise administrative costs for providers, but does it improve patient health or lower spending. At a macro level it sure doesn’t look like it. A recent study published in Health Affairs attempted to survey the research on whether value-based purchasing was achieving its goals. (HA Study)
In general, the past research has shown some possible reductions in spending, but no change in quality outcomes. These authors focussed on whether certain design features might account for more impact. More intensive programs obviously cost more to administer for both payers and providers, and those costs should be considered in determining any spending reductions. The authors reveiwed 24 programs, nine of which they characterized as high-intensity. Their analysis suggested that value-based purchasing programs generally had a positive effect on spending and quality, but the effects are small, and quality is not generally measured by actual health status of the patient. Higher intensity programs were generally more effective. The study isn’t particularly useful in my view, because it is basically non-quantitative and does no review of administrative costs or of actual patient health changes.