Growth of Population-Based Payments is Not Associated With a Decrease in Market-Level Cost Growth, Yet

This paper examines whether the magnitude of population-based value-based payment (VBP) models is associated with decreased spending and increased quality at the market level. Using Medicare claims Limited Data Set (LDS) for 2012-2015 and Truven Health MarketScan Commerical Database for 2012-2014, we conducted growth curve modeling and fixed effects regression analyses to examine whether the magnitude of population-based VBPs is correlated with Medicare and commercial cost growth or with average market quality performance for eight readmission and mortality-related hospital-based quality measures.

In the growth curve model, we found that markets with larger proportions of the population covered under a population-based VBP model had lower baseline per-beneficiary Medicare, but not commercial, costs. In the growth curve and fixed effects analysis, the proportion of lives covered under a population-based VBP model was not significantly associated with Medicare or commercial cost growth, and was significantly associated with modest quality improvement for one of eight quality measures. The current level of population-based VBP penetration may be insufficient to move the needle on health care spending. Increased participation in VBP models that include downside risk may be needed for these models to lead to reductions in overall health care spending.


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