How Does Medicare Value-Based Purchasing Work?

The U.S. health care system still largely pays for the volume of health care services provided rather than the value of that care to patients.

Over the past decade, however, Medicare has been laying the groundwork to become a value based purchaser of health care services. One important step in this transition is accurately measuring the value of care.

One such initiative is Medicares Value-Based Purchasing Program, created under the Affordable Care Act of 2010 to reward hospitals when they meet certain standards for delivering high-quality care to patients.

Still, paying for value is difficult. Policy-makers struggle with whether to use process or outcome measures, among other issues.

This Health Policy Snapshot, published online in June 2012, examines how value-based purchasing works and different ways of measuring outcomes.

Read more from RWJF's Health Policy Snapshot series.

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