Value-Based Payment in Medicare: Progress, Challenges, and Future Directions.

Despite having the highest healthcare spending globally, the United States lags in key health outcomes compared to peer nations. Over recent decades, this concerning disconnect between spending and outcomes has spurred substantial national reforms focused on promoting "value" over "volume" of care, prompting the development of numerous value-based payment models. In this analysis, we provide an overview of the experience with value-based payment efforts in the United States, particularly within the Medicare program. We outline and evaluate four main value-based care paradigms: public reporting programs, pay-for-performance models, episode-based payment models, and population-based payment models. Across these models, we argue that there has been mixed success in achieving cost reduction and quality improvements. While some episode-based and population-based models have shown modest savings, the overall efficacy of value-based care reforms remains suboptimal, and many models have yielded unintended consequences that have exacerbated existing health disparities. Considering this evidence alongside the current and emerging threats to value-based payment efforts, we identify several key areas for improvement across these models and discuss a path forward for strengthening value-based payment and delivery system reforms, highlighting key strategies to ensure that future value-based payment models achieve the goals of fostering high-quality, cost-effective, and equitable care.