Considerations for State Development of Performance Measure Sets

As states play a more active role in health care delivery system and payment reform, Medicaid programs have joined other public and private sector purchasers in measuring performance as part of value-based purchasing initiatives.

The Issue: While essential to value-based purchasing, performance measurement can create a significant administrative burden for providers. This burden can grow significantly when individual payers (e.g., insurers, managed care plans, and third-party administrators) utilize different measures. There is a growing interest by Medicaid programs and other payers in developing common measure sets to reduce administrative burden on providers and send a common message to them about performance accountability.

This guide provides an overview of the steps states should take in developing a performance measure set—either on their own or in partnership with others—identifies critical considerations, and offers guidance in selecting measures.

Key Initial Steps in Developing a Performance Measure Set:

  1. Whose performance is being mesured?
  2. What is the purpose of measuring performance?
  3. Is measurement specific to a state program or part of a multipayer initiative?
  4. How often will measurement occur?
  5. Who participates in the process and how are decisions made?

Conclusion: In developing a performance measurement initiative, the state should consider how measurement can evolve over time. While there may be short-term limitations to the depth and breadth of measures that can be implemented, the consideration of a broader array of measures gives states a pathway for expanding their measurement set and increasing their options for incentives.


About State Health and Value Strategies

State Health and Value Strategies, a program funded by the Robert Wood Johnson Foundation, provides technical assistance to support state efforts to enhance the value of health care by improving population health and reforming the delivery of health care services.