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October 22, 2007Value-Driven Health Care Purchasing: Four States that Are Ahead of the Curve |
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From The Commonwealth Fund: In the absence of a strong national directive for health care reform, some states have resorted to higher cost-sharing for public employees, tightened Medicaid eligibility and benefit cuts, or caps on spending. But a handful of states and counties are taking an entirely different approach in addressing rising health costs and quality concerns: obtaining greater value for their health care dollars through "value-based purchasing." Health care purchasers, suppliers, and consumers are rallying for better-quality health care. In response, several states are pursuing value-based purchasing (VBP) initiatives that emphasize collection of quality-of-care data, transparency of quality and cost information, and incentives. Minnesota, for example, has used incentives to achieve about $20 million in savings in 2006. Similarly, Wisconsin's Department of Employee Trust Funds has announced premium rate increases in the single digits for the third straight year. More research is necessary to determine the true impact of VBP, but health plans and providers are paying attention to and learning from these current efforts. It summarizes an analysis of four major initiatives aimed at pursuing value in the health care system that are led by, or include, state agencies. (These initiatives are examined in greater depth in four separate case studies, also published by The Commonwealth Fund.) GIC assigns its health plan members to a particular tier, based on quality and efficiency, and requires these plans to offer their members different levels of cost sharing, depending on which tier their chosen hospital or provider is designated. The Minnesota Smart Buy Alliance is a group of public and private health care purchasers, including the state agencies overseeing Medicaid and public employee health benefits, along with coalitions of businesses and labor unions. Model 1---Single Large Purchaser: involves a large purchaser working actively and cooperatively with suppliers while using its market power to make demands. Model 2---Purchaser Coalition: involves a group of public and private purchasers (or purchaser coalitions) working together to standardize demands on suppliers and share value-driven strategies.
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