When Should Medicare Use Voluntary versus Mandatory Payment Models to Drive Health Care Value?

In a recent Health Affairs article written with colleagues at the Perelman School of Medicine and the Leonard Davis Institute of Health Economics at the University of Pennsylvania, VSSL Director Dr. Joshua Liao provided thought leadership about the benefits and drawbacks of mandatory versus voluntary value-based payment models.

Liao JM, Pauly MV, Navathe AS. When Should Medicare Mandate Participation in Alternative Payment Models? Health Aff. 2020;39(2):305-309.

As Dr. Liao and colleagues note:

"The Centers for Medicare and Medicaid Services continues to propose and implement alternative payment models (APMs) to shift Medicare payment away from fee-for-service and toward approaches that emphasize health care value. As APMs expand in scope, one critical question is whether they should engage providers on a voluntary or a mandatory basis. Clinicians and policy makers may view the benefits and drawbacks of these two modes of participation differently."

In their paper, Dr. Liao and colleagues compared the benefits and drawbacks of mandatory and voluntary participation, based on clinical versus policy perspectives. The authors argued that both modes are necessary for APMs to achieve the goal of improving value, and provided guidance on how policymakers could match "the mode of participation and related financial incentives to each clinical scenario in which an APM is implemented."

For more on Dr. Liao's work on payment innovation, consider other #VSSLviews posts featuring presentations in Department of Medicine grand rounds and other venues.