VBID in practice

In a typical insurance plan, patients have a fixed copayment, insurance and deductible regardless of whether the treatment they receive is considered high or low value.  However, an alternative insurance structure–known as value-based insurance design (VBID)–uses a different approach.  Under VBID, patient cost sharing is higher for low-value treatments and lower or eliminated for high-value…

Is P4P doomed to fail?

There have been many pay-for-performance (P4P) programs that have been implemented to attempt to improve quality and reduce cost. The vast majority of these programs have not been able to demonstrate large or even any improvement in quality or cost. Some researchers claim that these programs have not worked due to the size of the…

Risk Sharing Agreements in the US

Outcomes-based risk sharing agreements tie reimbursement for medical goods or services to patient outcomes.  Despite the increasing demand from policymakers for value-based payment mechanism, risk-sharing agreements are not that comment.  A paper by Garrison et al. (2015) found that there were only 148 risk sharing agreements (RSAs) worldwide between the late 1990s and 2013 and only 18 of the…

What is Comprehensive Care for Joint Replacement?

Bundled Payments for Care Improvement (BPCI)A helpful post from Steven A. Farmer, Meaghan George and Mark B. McClellan explains.  Comprehensive Care for Joint Replacement (CCJR) is a bundled payment structure for hip and knee replacements.  CMS notes that: 2013, there were more than 400,000 inpatient primary procedures in Medicare, costing more than $7 billion for hospitalization alone.…

Hospital VBP gains the attention of the New York Times

The Healthcare Economist has already commented on the impending Medicare implementation of a hospital value-based purchased (VBP) system.  Now, Medicare’s hospital VBP program has garnered the attention of the popular press.  According to the New York Times: “The administration plans to establish ‘Medicare spending per beneficiary’ as a new measure of hospital performance…Hospitals could be…