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Value-based purchasing (VBP) refers to a broad set of performance-based payment strategies that link financial incentives to health care providers' performance on a set of defined measures in an effort to achieve better value. The U.S. Department of Health and Human Services is advancing the implementation of VBP across an array of health care settings in the Medicare program in response to requirements in the 2010 Patient Protection and Affordable Care Act, and policymakers are grappling with many decisions about how best to design and implement VBP programs so that they are successful in achieving stated goals.

This report summarizes the current state of knowledge about VBP based on a review of the published literature, a review of publicly available documentation from VBP programs, and discussions with an expert panel composed of VBP program sponsors, health care providers and health systems, and academic researchers with VBP evaluation expertise. Three types of VBP models were the focus of the review: (1) pay-for-performance programs, (2) accountable care organizations, and (3) bundled payment programs. The authors report on VBP program goals and what constitutes success; the evidence on the impact of these programs; factors that characterize high- and low-performing providers in VBP programs; the measures, incentive structures, and benchmarks used by VBP programs; evidence on spillover effects and unintended consequences; and gaps in the knowledge base.

Table of Contents

  • Chapter One


  • Chapter Two

    Environmental Scan of Existing Value-Based Purchasing Programs

  • Chapter Three

    Review of the Pay-for-Performance Literature

  • Chapter Four

    Review of the Accountable Care Organization Literature

  • Chapter Five

    Review of the Bundled Payment Literature

  • Chapter Six

    Summary of Technical Expert Panel Discussion

  • Chapter Seven


  • Appendix A

    Value-Based Purchasing Programs Included in Review of Public Documents

  • Appendix B

    Program Design and Context Variables

Research conducted by

The research described in this report was sponsored by the Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services, and was conducted in RAND Health, a division of the RAND Corporation.

This report is part of the RAND Corporation research report series. RAND reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

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