In the largest and most comprehensive initiative of its kind, the public-private Health Care Payment Learning & Action Network (LAN) last fall announced results from a nationwide effort measuring adoption of alternative payment models (APMs) by both commercial and public health plans. The findings estimated that nearly a quarter of payments would be in APMs in 2016, including 41% for Medicare Advantage and 22% for commercial payments. Importantly, this historic effort paves the way for future APM measurement—including an upcoming 2017 LAN initiative—as health plans address rising costs by shifting to smarter spending with better health outcomes.
For the first time ever, the 2016 measurement effort brought together public and private payers to improve our collective understanding of the state of payment innovation. The LAN’s survey instrument queried commercial, Medicare Advantage, Medicaid managed-care plans, and fee-for-service Medicaid states. Survey questions and metrics tracked the categories of the LAN’s APM Framework, measuring health plan spending through APMs. This collaboration was a major step forward for aligning government and private payers, and illustrates what we can accomplish when diverse stakeholders work together toward a shared vision.
The LAN’s 2016 report shows growing alignment among paayers as they move into value-based payment models. When comparing 2015 and 2016 figures, we see a shift toward Categories 3 and 4 of the APM Framework. These results point to progress toward payment models in which providers can focus on delivering efficient, high-quality care for all patients. Additionally, the results show Medicare is not operating in isolation in the move to value in healthcare. Instead, we see the movement to smarter spending being achieved through collaboration amongst all payers.
Rising costs, missed opportunities to improve care, and a growing understanding that the fee-for-service model may impede coordinated care make the shift to smarter spending increasingly urgent. The question is not whether we need to shift, but how quickly it can be accomplished. The survey shows important progress in the use of APMs. The prevalence of payment reforms highlights the need for emphasis on tackling operational issues in care delivery and sharing effective strategies to accelerate the transition to better outcomes for patients and families. Further measurement efforts can help characterize how much of the APM payments are linked to quality and value, and which forms of APMs are having the greatest impact. By participating in the LAN’s measurement efforts, payers can work toward harmonization of payment approaches and prepare for the future by viewing their payments through an APM lens.
The LAN is gearing up for its second nationwide APM measurement effort, again measuring APM adoption among payers. By developing a common nomenclature for APMs—and promoting broad collective understanding of effective approaches—the framework has established a path that others can follow to accelerate reforms.
The LAN aims to accelerate the adoption of effective payment reforms through shifting more healthcare spending into APMs. The 2017 measurement effort will be an important contribution to continued momentum. Vital to achieving our goal, we are seeking input from those at the front lines about challenges in APM adoption and how we can collaborate on solutions. We thank all those who participated in the 2016 survey, and urge all to join our upcoming efforts and encourage your payer partners to support this common vision with action on the ground.
Dr. Sam Nussbaum is a senior fellow at the University of Southern California Schaeffer Center for Health Policy and Economics; Dr. Mark D. Smith is a visiting professor, University of California at Berkeley, and clinical professor of medicine, University of California at San Francisco; and Dr. Mark McClellan is director of the Robert J Margolis Center for Health Policy and the Margolis Professor of Business, Medicine and Health Policy at Duke University.