Value-Base Care Will Survive Disappointing Setback

Last week’s announcement from the Centers for Medicare & Medicaid Services (CMS) that it was canceling programs aimed at moving Medicare away from the traditional fee-for-service payment model was “incredibly disappointing,” according to Molly Loftus, Mercer’s Chief Health Actuary. As the nation’s single largest payer, Medicare has the ability to move the market to both the benefit and the detriment of private payers.

Although we view the news from CMS as a setback, we don’t expect it will end the ongoing shift to value-based care -- provider reimbursement models that reward value over volume. On the heels of the announcement, we were encouraged to hear both the American Hospital Association and the American College of Cardiology expressing interest in furthering value-based care (VBC) arrangements.

While Medicare has the purchasing power to quickly drive change, employers’ purchasing power is significant. Collectively, employers provide health insurance to 177 million Americans; that’s more than half of the population. Private and public sector purchasers are deploying VBC arrangements to achieve the triple aim of reduced costs, improved quality, and enhanced member experience with healthcare. If every employer focuses on increasing the value of care their health plan members receive, those actions collectively will move the market.

All employers, no matter how big or small, need to understand that VBC is happening now. Your employees may already be participating in -- and you may already be paying for -- these solutions. Talk with your benefits consultant, health plan representative, or healthcare delivery system to understand what your employees are experiencing today and what other options exist to leverage fully the VBC opportunity.

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