Hospitals and health systems are actively working to serve their communities in numerous ways, including through the adoption of initiatives that control costs, improve outcomes and enhance patient-centered care. Many are working with payers to establish value-based payment (VBP) arrangements to support these goals. There is a wide range of approaches to VBP, from programs that incentivize public reporting on quality metrics to prospective payments for all of the healthcare needs of a given population. With no single VBP “destination,” hospitals and health systems are evaluating which models may best support their organizational and community goals. The migration from fee-for-service payment to VBP is well underway. While the Centers for Medicare & Medicaid Services has recently promoted increased flexibility for providers in VBP models, many states and private payers also are pursuing and expanding VBP arrangements.

In a new white paper prepared for the American Hospital Association, Manatt Health provides information to help hospitals and health systems evaluate which VBP model(s) may support their organizations’ goals, and provides insights from seven hospitals and health systems participating in different VBP arrangements. The report examines the drivers and prevalence of VBP arrangements; the conditions and factors that foster, accelerate and—in some cases—stifle VBP transitions; and the tools, capabilities and approaches necessary to succeed. It considers the impact of market dynamics on VBP strategies, as well as the complexities and requirements of transitioning to value. Finally, the report highlights critical issues for hospitals and health systems to consider when evaluating their VBP options.

Click here to read the full AHA paper.