Five Recommendations to Accelerate Adoption and Transformation

A decade of innovation and experimentation has failed to transform the health care system to one that pays for value rather than volume. It is now time to reconsider how value-based payment models can generate substantial savings and improve quality and health equity. Experts from the University of Pennsylvania, with input from a national panel of experts, reviewed the effectiveness of past payment reforms implemented by the Centers for Medicare and Medicaid Services (CMS) and made recommendations about how to accelerate and complete the nation’s transformation to value-based payment. This brief summarizes recommendations that provide a path toward widespread adoption and success of alternative payment models, producing better health outcomes for all Americans, reducing wasteful spending, improving health equity, and more effectively stewarding taxpayer funds to support other national priorities.1


1. CMS should articulate a clear vision and strategy for the evolution of value-based payment, implemented through a carefully managed portfolio of initiatives and aligned across payers, service lines, and health plans.

2. CMS should move away from voluntary programs toward mandatory participation in advanced payment models, whenever feasible.

3. When requiring participation in advanced payment models is not feasible, CMS should encourage providers to participate by reducing the administrative burdens, committing to long-term contracts, and reducing the attractiveness of fee-for- service arrangements.

4. For health systems already participating in value-based payment, CMS should accelerate the movement from upside-only shared savings to risk-bearing, population-based alternative payment models.

5. CMS should proactively promote equity with advanced payment models that prioritize reducing disparities and tie health equity outcomes to financial outcomes.

Current Evidence

Alternative payment models can reduce costs and improve quality, although the savings and quality gains have been modest thus far. The decade of experimentation has produced the necessary knowledge to design and implement alternative payment models to transform health care delivery. CMS should expand the most promising models and phase out underperforming ones.


This work was funded by Signify Health, with an accompanying white paper.