Emerging lessons from regional and state innovation in value-based payment reform: balancing collaboration and disruptive innovation.

CONTEXT: In recent decades, practitioners and policymakers have turned to value-based payment initiatives to help contain spending on health care and to improve the quality of care. The Robert Wood Johnson Foundation funded 7 grantees across the country to design and implement value-based, multistakeholder payment reform projects in 6 states and 3 regions of the United States. METHODS: As the external evaluator of these projects, we reviewed documents, conducted Internet searches, interviewed key stakeholders, cross-validated factual and narrative interpretation, and performed qualitative analyses to derive cross-site themes and implications for policy and practice. FINDINGS: The nature of payment reform and its momentum closely reflects the environmental context of each project. Federal legislation such as the Patient Protection and Affordable Care Act and federal and state support for the development of the patient-centered medical home and accountable care organizations encourage value-based payment innovation, as do local market conditions for payers and providers that combine a history of collaboration with independent innovation and experimentation by individual organizations. Multistakeholder coalitions offer a useful facilitating structure for galvanizing payment reform. But to achieve the objectives of reduced cost and improved quality, multistakeholder payment innovation must overcome such barriers as incompatible information systems, the technical difficulties and transaction costs of altering existing billing and payment systems, competing stakeholder priorities, insufficient scale to bear population health risk, providers' limited experience with risk-bearing payment models, and the failure to align care delivery models with the form of payment. CONCLUSIONS: From the evidence adduced in this article, multistakeholder, value-based payment reform requires a trusted, widely respected "honest broker" that can convene and maintain the ongoing commitment of health plans, providers, and purchasers. Change management is complex and challenging, and coalition governance requires flexibility and stable leadership, as market conditions and stakeholder engagement and priorities shift over time. Another significant facilitator of value-based payment reform is outside investment that enables increased investment in human resources, information infrastructure, and care management by provider organizations and their collaborators. Supportive community and social service networks that enhance population health management also are important enablers of value-based payment reform. External pressure from public and private payers is fueling a "burning bridge" between the past of fee-for-service payment models and the future of payments based on value. Robust competition in local health plan and provider markets, coupled with an appropriate mix of multistakeholder governance, pressure from organized purchasers, and regulatory oversight, has the potential to spur value-based payment innovation that combines elements of "reformed" fee-for-service with bundled payments and global payments.

Patient-centered innovation in health care organizations: a conceptual framework and case study application.

BACKGROUND: Patient-centered innovation is spreading at the federal and state levels. A conceptual framework can help frame real-world examples and extract systematic learning from an array of innovative applications currently underway. The statutory, economic, and political environment in Washington State offers a special contextual laboratory for observing the interplay of these factors. PURPOSE: We propose a framework for understanding the process of initiating patient-centered innovations-particularly innovations addressing patient-centered goals of improved access, continuity, communication and coordination, cultural competency, and family- and person-focused care over time. The framework to a case study of a provider organization in Washington State actively engaged in such innovations was applied in this article. METHODS: We conducted a selective review of peer-reviewed evidence and theory regarding determinants of organizational change. On the basis of the literature review and the particular examples of patient-centric innovation, we developed a conceptual framework. Semistructured key informant interviews were conducted to illustrate the framework with concrete examples of patient-centered innovation. FINDINGS: The primary determinants of initiating patient-centered innovation are (a) effective leadership, with the necessary technical and professional expertise and creative skills; (b) strong internal and external motivation to change; (c) clear and internally consistent organizational mission; (d) aligned organizational strategy; (e) robust organizational capability; and (f) continuous feedback and organizational learning. The internal hierarchy of actors is important in shaping patient-centered innovation. External financial incentives and government regulations also significantly shape innovation. PRACTICE IMPLICATIONS: Patient-centered care innovation is a complex process. A general framework that could help managers and executives organize their thoughts around innovation within their organization is presented.

Innovation in patient-centered care: lessons from a qualitative study of innovative health care organizations in Washington State.

BACKGROUND: Growing interest in the promise of patient-centered care has led to numerous health care innovations, including the patient-centered medical home, shared decision-making, and payment reforms. How best to vet and adopt innovations is an open question. Washington State has been a leader in health care reform and is a rich laboratory for patient-centered innovations. We sought to understand the process of patient-centered care innovation undertaken by innovative health care organizations - from strategic planning to goal selection to implementation to maintenance. METHODS: We conducted key-informant interviews with executives at five health plans, five provider organizations, and ten primary care clinics in Washington State. At least two readers of each interview transcript identified themes inductively; final themes were determined by consensus. RESULTS: Innovation in patient-centered care was a strategic objective chosen by nearly every organization in this study. However, other goals were paramount: cost containment, quality improvement, and organization survival. Organizations commonly perceived effective chronic disease management and integrated health information technology as key elements for successful patient-centered care innovation. Inertia, resource deficits, fee-for-service payment, and regulatory limits on scope of practice were cited as barriers to innovation, while organization leadership, human capital, and adaptive culture facilitated innovation. CONCLUSIONS: Patient-centered care innovations reflected organizational perspectives: health plans emphasized cost-effectiveness while providers emphasized health care delivery processes. Health plans and providers shared many objectives, yet the two rarely collaborated to achieve them. The process of innovation is heavily dependent on organizational culture and leadership. Policymakers can improve the pace and quality of patient-centered innovation by setting targets and addressing conditions for innovation.

The 10 Conditions That Increased Vermont's Readiness to Implement Statewide Health System Transformation.

Following an arduous, 6-year policy-making process, Vermont is the first state implementing a unified, statewide all-payer integrated delivery system with value-based payment, along with aligned medical and social service reforms, for almost all residents and providers in a state. Commercial, Medicare, and Medicaid value-based payment for most Vermonters will be administered through a new statewide accountable care organization in 2018-2022. The purpose of this article is to describe the 10 conditions that increased Vermont's readiness to implement statewide system transformation. The authors reviewed documents, conducted internet searches of public information, interviewed key informants annually in 2014-2016, cross-validated factual and narrative interpretation, and performed content analyses to derive conditions that increased readiness and their implications for policy and practice. Four social conditions (leadership champions; a common vision; collaborative culture; social capital and collective efficacy) and 6 support conditions (money; statewide data; legal infrastructure; federal policy promoting payment reform; delivery system transformation aligned with payment reform; personnel skilled in system reform) increased Vermont's readiness for system transformation. Vermont's experience indicates that increasing statewide readiness for reform is slow, incremental, and exhausting to overcome the sheer inertia of large fee-based systems. The new payments may work because statewide, uniform population-based payment will affect the health care of almost all Vermonters, creating statewide, uniform provider incentives to reduce volume and making the current fee-based system less viable. The conditions for readiness and statewide system transformation may be more likely in states with regulated markets, like Vermont, than in states with highly competitive markets.

Effects of a statewide physician-led quality-improvement program on the quality of cardiac care.

BACKGROUND: Several states have implemented mandatory public reporting of outcomes of cardiac revascularization procedures. Washington is the first to develop a nonmandatory, physician-led reporting program with public accountability and universal hospital participation. The purpose of this study was to determine whether quality improvement interventions resulted in the correction of data deficiencies and performance outliers for cardiac revascularization procedures. METHODS: From 1999 through 2003, there were 18 hospitals with coronary bypass surgery and interventional cardiology programs and 12 with only the latter. All patients > or =18 years undergoing 24372 isolated coronary bypass surgeries and 59,656 percutaneous coronary interventions were included. After 1999 to 2001 data were analyzed in early 2002, the Clinical Outcomes Assessment Program implemented a 6-step quality-improvement intervention to measure and remeasure data quality, process compliance, and performance. RESULTS: In 2003, 4 of the 18 surgery programs had 1 statistical outlier with respect to 4 performance measures, whereas 2 of 30 coronary intervention programs were mortality outliers. For bypass surgery, all programs maintained full compliance with program standards by adhering to timely and reliable submission of data, developing plans to address performance outliers, and demonstrating that outlier status did not persist from baseline to remeasurement. For coronary interventions, 1 program was a persistent outlier for mortality in 2002 and 2003. CONCLUSIONS: The Clinical Outcomes Assessment Program has successfully monitored cardiac care patterns in Washington State over a 5-year period. Most hospitals that perform coronary revascularization procedures meet acceptable performance standards.

Implementing Value-Based Payment Reform: A Conceptual Framework and Case Examples.

This article develops a conceptual framework for implementation of value-based payment (VBP) reform and then draws on that framework to systematically examine six distinct multi-stakeholder coalition VBP initiatives in three different regions of the United States. The VBP initiatives deploy the following payment models: reference pricing, "shadow" primary care capitation, bundled payment, pay for performance, shared savings within accountable care organizations, and global payment. The conceptual framework synthesizes prior models of VBP implementation. It describes how context, project objectives, payment and care delivery strategies, and the barriers and facilitators to translating strategy into implementation affect VBP implementation and value for patients. We next apply the framework to six case examples of implementation, and conclude by discussing the implications of the case examples and the conceptual framework for future practice and research.

A report on eight early-stage state and regional projects testing value-based payment.

To help contain health care spending and improve the quality of care, practitioners and policy makers are trying to move away from fee-for-service toward value-based payment, which links providers' reimbursement to the value, rather than the volume, of services delivered. With funding from the Robert Wood Johnson Foundation, eight grantees across the country are designing and implementing value-based payment reform projects. For example, in Salem, Oregon, the Physicians Choice Foundation is testing "Program Oriented Payments," which include incentives for providers who follow a condition-specific program of care designed to meet goals set jointly by patient and provider. In this article we describe the funding rationale and the specific objectives, strategies, progress, and early stages of implementation of the eight projects. We also share some early lessons and identify prerequisites for success, such as ensuring that providers have broad and timely access to data so they can meet patients' needs in cost-effective ways.