U.S. Health Care System is Progressing in the Adoption of Alternative Payment Models that Promote Quality and Value

For Immediate Release

October 25, 2016

Contact:

Jen Pollakusky, jpollakusky@rippleeffect.com, 516-732-1972

Kris Prendergast, kprendergast@mitre.org, 443-890-6712

U.S. Health Care System is Progressing in the Adoption of Alternative Payment Models that Promote Quality and Value

New report from the Health Care Payment Learning & Action Network finds that public and private health plans are taking steps to tie payments to care that provide quality and value

Washington, D.C. – A report released today by the Health Care Payment Learning & Action Network (LAN) finds that progress is being made across the country to improve quality, reduce costs, and provide better health outcomes for patients through the adoption of alternative payment models (APMs).

Download the report

The LAN report provides results of a recently completed study – the largest and most comprehensive of its kind – measuring use of APMs among public and private health plans that agreed to participate in the study. Conducted from May 19, 2016 to July 13, 2016, the findings capture actual health care spending from 2015 and provide an estimate of spending as of January 2016 across commercial, Medicare Advantage, and Medicaid market segments. More than 70 health plans participated in the study, accounting for 67% of the U.S. population. Nationally, nearly 25% of payments are in APMs supporting better care coordination and patient care.

For the 2016 estimate, data on contracts in place as of January 1, 2016 was collected from health plans of varying size and geographies representing more than 128 million insured lives, or nearly 44% of the combined Commercial, Medicare Advantage and, Medicaid markets. The data reveals progress toward APM implementation, with responding plans showing nearly 25% of payments expected to flow through APMs in 2016. The results also highlight that continuing payment innovation is required to transform the health care system to one that ties payment to quality and value.

For the 2015 metrics, participating health plans submitted data to the LAN, America’s Health Insurance Plans (AHIP), or the Blue Cross Blue Shield Association (BCBSA) and aggregated results were calculated. The 2015 results represent nearly 200 million Americans and approximately 67% of the covered population in three market segments. The data highlights total health care spending across Category 1 (62%), Category 2 (15%), and Categories 3 and 4 (23% combined).

“Conducting the study has been a critically important first step in gauging the nation’s collective progress toward the adoption of APMs,” said Sam Nussbaum, chair of the LAN’s APM Framework & Progress Tracking Work Group that led this effort. “The results provide an essential benchmark for future measurement efforts. We hope the collection process coupled with the analytics to determine what is working will accelerate the transformation to value-based payment.”

The study assesses progress towards achieving the LAN’s goal of tying 30% of total U.S. health care payments to APMs by 2016.

“I’m excited to see that almost 25% of payments nationally are in APMs supporting better care, smarter spending, and healthier people,” said Patrick Conway, Chief Medical Officer for the Centers for Medicare & Medicaid Services (CMS) and Director of the Center for Medicare & Medicaid Innovation. “CMS now wants to work with the private sector to reach our goal of 50% of payments in these models by the end of 2018.”

“Our objective with this initiative was to forge a common direction and determine the pace at which we’re moving towards value-based payments,” said Anne Gauthier, LAN Project Leader. “This study sheds light on the types of payment models that are currently being used across public and private sectors in an effort to move closer to our collective goals.”

The results highlight several key areas, including how health plans pay providers and what progress is being made over time. Participation in this effort has enabled health plans involved in the study to better align various definitions of payment models, improve their tracking of payments via different payment models, and promote a more consistent approach across public and private sectors.

“This report shows the meaningful progress we’ve made to improve quality and lower costs,” said Marilyn Tavenner, President and CEO, America’s Health Insurance Plans. “Health plans, doctors, hospitals, businesses, and public programs are all changing, all collaborating – and all improving the way we deliver care. We’re being smarter purchasers of health care by prioritizing efficient, effective, and evidence-based approaches to delivering care. That means better quality for patients and lower costs for consumers.”

Download the report (PDF) 

About the Health Care Payment Learning & Action Network
The LAN, launched in March 2015 by the U.S. Department of Health and Human Services (HHS) brings together public, private, and non-profit sectors to transition to successful alternative payment models (APMs) that improve health care quality. Through the LAN’s collaborative structure, more than 6,500 participants are taking action towards APM adoption and implementation, a critical step in achieving the Triple Aim of better care, smarter spending, and healthier people. The LAN is working to accelerate adoption of APMs with the goal of tying 50% of U.S. health care payments to APMs by 2018. For more information, go to www.hcp-lan.org

To achieve the goal of better care, smarter spending, and healthier people, the U.S. health care system must substantially reform its payment structure to incentivize quality, health outcomes, and value over volume. The Health Care Payment Learning and Action Network (LAN) was established as a collaborative network of public and private stakeholders, including health plans, providers, patients, employers, consumers, states, federal agencies, and other partners within the health care community.

5 Comments
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