for health care delivery system transformation. Here, too, progress is under way. In the private market, Blue Cross Blue Shield of Massachusetts’ Alternative Quality Contract and Geisinger’s ProvenCare® are models of bundled, value-based reimbursement that are receiving increasing attention. Several pilot initiatives are also under way in the private sector. UnitedHealth Group began an episode-based reimbursement plan for oncology practices, and the Integrated Healthcare Association launched a Bundled Episode Payment Pilot Program involving several of the nation’s largest private insurers. The shift toward value-based reimbursement is also occurring at the state level. In the face of acute budget pressures, more and more states are shifting Medicaid enrollees to managed-care plans. For example, New York and Florida—two of the states with the largest Medicaid populations—plan to enroll all beneficiaries in managed-care plans within the next several years.14

A fundamental opportunity for transitioning toward value-based reimbursement lies with the federal government and in the implementation of certain provisions in recent health reform legislation. The Centers for Medicare & Medicaid Services has been experimenting with value-based reimbursement pilots for years, but elements of the Affordable Care Act (ACA) have the potential to accelerate this transition. Provisions in the ACA establish programs for bundled payments, value-based purchasing, and for reducing Medicare payments to hospitals for errors and avoidable readmissions. One particularly relevant provision is the Medicare Shared Savings Program, designed to spur the development of Accountable Care Organizations (ACOs). Under this program, ACOs are responsible for providing high-quality care and, if they reduce costs for Medicare patients, share in the savings.

Further progress is necessary, but the demand for high-value care is clearly growing. Employers, individuals, private insurers, and public payers are all facing pressure to contain costs, and are seeking health care delivery organizations that can do so while maintaining quality.

The ACA also created the Center for Medicare & Medicaid Innovation, which is charged with investing a budget of $10 billion over the next 10 years to accelerate the development and implementation of innovative payment and delivery models for Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP). The Innovation Center already launched programs for the development of ACOs and Patient-Centered Medical Homes, as well as bundled payment initiatives for acute care. While the initial target of the Innovation Center is cost reduction in federal programs, its ultimate goal is to develop scalable models for all payer arrangements.

Further progress is necessary, but the demand for high-value care is clearly growing. Employers, individuals, private insurers, and public payers are all facing pressure to contain costs, and are seeking health care delivery organizations that can do so while maintaining quality. Current and forthcoming initiatives provide considerable incentives to implement the strategies for high-value care described in this Checklist.



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