Value-Based Purchasing

Value Based Purchasing (VBP) is a concept by which "purchasers" of health care (government, employers, and consumers) hold the health care system (physicians, hospitals, health plans, etc.) accountable for both quality and cost of care. VBP programs are based on health benefit plan models that promote health care quality improvement and should result in systemic cost containment or reduction. VBP programs are typically structured around a combination of incentives intended to encourage better health care decision making by both plan beneficiaries and clinical providers. A core requirement of effective VBP program design is a system to measure and report comparative quality and cost performance to facilitate data transparency across all program participants.

The American Academy of Family Physicians (AAFP) recognizes the urgency to improve both efficiency and effectiveness in the delivery of medical care, in which "efficiency" is understood to mean "doing the thing right" and "effectiveness" means "doing the right thing." VBP is one approach to achieving a balance between efficiency and effectiviness. However, given the technical, legal and ethical challenges in designing and implementing VBP, it is imperative that the key physician measurement processes used in VBP should be transparent and adhere to the AAFP policies on "Performance Measures Criteria," "Physician Profiling," "Data Stewardship," and "Transparency."

The AAFP supports VBP programs that adhere to these principles:

  1. Focus on improved quality of care at similar or lower costs
  2. Support the physician/patient relationship
  3. Utilize quality and cost performance measures that are evidence-based
  4. Involve practicing physicians in program design
  5. Use reliable, accurate, and scientifically valid data
  6. Provide positive physician incentives
  7. Offer voluntary physician participation

Based on these principles, the AAFP will use its influence to support and encourage the utilization of the following guidelines:

  1. The purpose of VBP should be to improve effectiveness and efficiency of care to patients and their communities.
  2. VBP should enhance adherence to evidence-based practice guidelines and measures endorsed by the National Quality Forum.
  3. VBP should be based on reliable, valid, verifiable, and transparent data.
  4. VBP should be flexible in the following ways:
    1. Responsive to community needs, preferences and resources
    2. Adaptable to different practice organizational models, structures of care, and physician specialties
    3. Responsive to individual patient preferences and socio-cultural backgrounds
    4. Respectful of differences in adoption of health information technology (HIT) while encouraging its effective spread
  5. VBP should be accountable to purchasers, consumers, and providers.
  6. VBP should encourage the establishment of robust patient-centered medical homes, including the systems and HIT that are structurally necessary.
  7. VBP should involve multidimensional and comprehensive measurement of both quality and cost.
  8. VBP should advance knowledge of effective and efficient episodes of care.
  9. VBP should recognize explicitly the tradeoffs in value decisions.
  10. VBP should be sensitive to the issue of health disparities.
  11. VBP should create alignment of incentives among clinicians, systems, patients, and communities.
  12. VBP should recognize, disclose and balance the administrative burden and costs to clinicians and the health systems of measurement and participation in VBP with the incentives of the program.
  13. VBP should recognize the path of quality and efficiency improvement in the medical practice and system, and not solely the outcome.

(2009 COD) (2014 COD)