Promoting Solutions:
Alternative Payment Models
The Challenge
Fee-for-service, a volume-driven payment model, can lead to lower quality care and overutilization that drive higher healthcare costs because there is no incentive for healthcare providers to achieve better quality outcomes.
Our Solutions
An alternative payment model (APM) offers healthcare providers incentives to increase efficiency of care and coordination while improving quality and outcomes. Currently, the Florida Alliance for Healthcare Value is working to advance development and implementation of a variety of employer-led APM programs such as bundles, episodes of care, and centers of excellence.
A bundled payment, also called a typical or traditional bundle, was one of the first APMs developed. It is typically offered by a third-party company that contracts directly with an employer. The bundle is a standard price for a group of medical or surgical services such as a right knee replacement at a hospital. Bundled payments are narrow in scope and timeframe, focusing on one primary service. For example, a knee replacement bundle typically would not include follow-up physical therapy.
Episode of care (EOC) payments are often called expanded bundles or bundles V2.0. They are designed to cover longer timeframes and multiple places of service. An EOC can cover a one-time procedure like a knee replacement or management of a chronic condition like diabetes. Each procedure or chronic condition has a price associated with treatment, and if the cost goes beyond the EOC price, the third-party company offering the EOC is responsible for the difference.
With our APM work, the Florida Alliance for Healthcare Value is promoting the following collective value agenda developed by the National Alliance of Healthcare Purchaser Coalitions (National Alliance):
- Common Episodes Definitions — To align and focus care management and improvement efforts
- Quality and Appropriateness of Care — To ensure and promote the right care at the right place for the right patient
- Double-Sided Risk — Alignment to incentivize a shared commitment to success and patient-centered value
- Warrantied Performance — To provide accountability for high performance and outcomes
- Relevance for Purchasers, Patients, and Providers — To enable substantive and sustainable benefits for all stakeholders
We also have a number of staff and employer members who are actively involved in work groups and targeted efforts through the National Alliance to promote alternative payment models:
- National Payment Innovation Advisory Group
- Ashley Tait-Dinger, Florida Alliance for Healthcare Value
- Ashley Bacot, Rosen Hotels & Resorts
- Beth Curran, Orange County Public Schools
- Mark Weinstein, Independent Colleges and Universities Benefits Association
- Value-Based Contracting Affinity Group
- Ashley Tait-Dinger, Florida Alliance for Healthcare Value
- Episodes of Care Affinity Group
- Ashley Tait-Dinger, Florida Alliance for Healthcare Value
