National Academy of Medicine

Competencies and Tools to Shift Payments from Volume to Value: A Vital Direction for Health and Health Care

By The Honorable Michael O. Leavitt, Mark McClellan, Susan D. DeVore, Elliott Fisher, Richard J. Gilfillan, H. Stephen Lieber, Richard Merkin, Jeffrey Rideout, and Kent J. Thiry
September 19, 2016 | Discussion Paper

Health reform remains at the forefront of U.S. policy debates because of continued growth in public and private health care spending alongside increasing capabilities of medical care—as well as persistent evidence of inefficiencies and substantial variance in use, cost, and quality. Bipartisan support has emerged for moving away from FFS payment because of its failure to support many innovative approaches to care delivery and its administrative burdens on clinicians and patients.

Alternative payment models have proliferated in federal, state, and commercial initiatives, including the Medicare and CHIP Reauthorization Act (MACRA) of 2015, with the hope of aligning financial support with higher-value care. The Health Care Payment Learning and Action Network has described a variety of payment reforms and accompanying delivery models that represent a shift away from FFS, such as accountable care organizations (ACOs), fixed bundled payments for episodes of care, and primary care medical homes with shared savings. It is a reflection of the expansion of such alternative payment models (APMs) that as of January 2016 847 ACOs collectively provide coverage to over 28.3 million Americans. With similar models not only proliferating in traditional Medicare but in Medicare Advantage plans, Medicaid programs, and commercial and employer plans, most Americans probably will be affected by one or more of those payment models in the near or not too distant future.

About the Vital Directions for Health and Health Care Series

Vital DirectionsThis publication is part of the National Academy of Medicine’s Vital Directions for Health and Health Care Initiative, which commissioned expert papers on 19 priority focus areas for U.S. health policy by more than 100 leading researchers, scientists, and policy makers from across the United States. The views presented in this publication and others in the series are those of the authors and do not represent formal consensus positions of the NAM, the National Academies of Sciences, Engineering, and Medicine, or the authors’ organizations.
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Suggested Citation

Leavitt, M. O., M. McClellan, S. D. DeVore, E. Fisher, R. J. Gilfillan, H. S. Lieber, R. Merkin, J. Rideout, and K. J. Thiry. 2016. Competencies and Tools to Shift Payments from Volume to Value: A Vital Direction for Health and Health Care. NAM Perspectives. Discussion Paper, National Academy of Medicine, Washington, DC. doi: 10.31478/201609o


Disclaimer: The views expressed in this paper are those of the authors and not necessarily of the authors’ organizations, the National Academy of Medicine (NAM), or the National Academies of Sciences, Engineering, and Medicine (the National Academies). The paper is intended to help inform and stimulate discussion. It is not a report of the NAM or the National Academies. Copyright by the National Academy of Sciences. All rights reserved.