Value-driven health care purchasing

A new report from the Commonwealth Fund examines "value-based purchasing" (VBP), which are public/private partnerships by health care providers, health care plans, and state Medicaid programs that "emphasize collection of quality-of-care data, transparency of quality and cost information, and incentives" to save money in their purchasing contracts. (Source: Overview and the report "Value-Driven Health Care Purchasing: Four States that Are Ahead of the Curve.") VBP grew out of President Bush's Value-Driven Health Care Initiative, which called on employers "to use four cornerstones when they purchase health insurance: interoperable health care information technology, reporting of quality-of-care measures, reporting of health care price information, and incentives for high-quality, cost-effective care."

According to the Commonwealth Fund report, there are three types of VBP:

• Single Large Purchaser: involves a large purchaser working actively and cooperatively with suppliers while using its market power to make demands. Such purchasers working alone are limited in influence but can move quickly and be pioneers.
• 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. Reaching agreement among purchasers with different priorities can be challenging, but coalitions can leverage greater market share and wield more influence with suppliers.
• Mixed Coalition: involves a group of health care purchasers and suppliers working cooperatively to promote transparency and incentives. Reaching consensus is very difficult and time consuming, and leads to watered down strategies, but multi-stakeholder initiatives have the potential to make the most significant impact on the market.

The report examines these approaches to VBPs in four states, along with the positives and negatives of each approach.