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Value-based provider payment: towards a theoretically preferred design.

Daniëlle Cattel1, Frank Eijkenaar1, Frederik T Schut1

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Value-based payments (VBP) in healthcare require clear definitions of

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Area of Science:

  • Health economics
  • Healthcare policy
  • Payment reform

Background:

  • Policymakers globally are exploring value-based payments (VBP) to enhance healthcare value.
  • The definition of 'value' in healthcare and its link to payment design remain unclear.

Purpose of the Study:

  • To identify dimensions of value that VBP should ideally stimulate.
  • To construct a framework for a theoretically preferred VBP design.

Main Methods:

  • Synthesis of theoretical and empirical studies on payment incentives.
  • Development of a VBP framework based on identified value dimensions.

Main Results:

  • VBP should comprise a large base payment (implicitly stimulating value) and a smaller pay-for-performance component (explicitly rewarding measurable value).
  • The base payment design is crucial and should be paid to multidisciplinary groups for predefined populations, be fixed, risk-adjusted, and include risk mitigation.

Conclusions:

  • A well-designed base payment is essential for effective VBP.
  • Practical operationalization of VBP involves significant trade-offs.