A Place-Based Approach May Help the US Implement Payment Reform

Although accountable care organizations (ACOs) cover more than 32 million people in the United States, the financial savings have been limited and the outcomes are unknown. Place-based approaches aimed at integrating care, improving population health, and controlling costs may be beneficial to adopt as the United States moves away from mandatory participation in payment reform.

The authors of a JAMA Viewpoint article defined place-based approaches as “giving healthcare organizations or systems some degree of responsibility for the health or care of all individuals living in a specific place: a geographically defined area such as a county, hospital referral region, or state.”

Other countries, including England, Sweden, and New Zealand, have already adopted place-based approaches. Specifically, England’s National Health Service (NHS) has moved from testing voluntary local change to implementing mandatory regional reforms. In 2014, the NHS started the “Vanguard” program, which considered the ACO initiatives in the United States to attempt to integrate care, improve health, and manage costs.

“Under the scheme, 50 groups of NHS organizations tested various new care models including hospital-led “primary and acute care systems,” aiming to integrate primary and secondary care, and primary care—led “multispecialty community providers,” the authors explained.

Additionally, in England NHS leaders have mandated and created 44 sustainability and transformation partnerships (STPs) that cover the entire country. These STPs are referred to as the place-based partnerships because of their focus on improving care and controlling costs for geographically defined populations.

A place-based global payment approach in the United States would help address the issues of mixed payment models, which create conflicting financial incentives for clinicians and organizations, the authors wrote. Also, the current US performance measures are generally limited to clinical performance; however, if the performance measures are shifted to focus on health outcomes, it would encourage health organizations to consider non-clinical community-based interventions, they argued.

Furthermore, utilizing performance and cost measurements that focus on all residents of a certain region would allow policy makers to reward organizations that are improving regional population health.

If STPs were a mandatory national program, they may fix the risks that develop through the voluntary programs, such as inequality among regions. Although there may be challenges with implementing a place-based approach, the authors explained that it would help improve care and minimize costs overall.

“Systematic evaluation will be needed on both sides of the Atlantic as the health systems in the United States and in England strive to achieve the goals of better health, improved care, and lower costs,” concluded the authors.

References

Briggs ADM, Alderwick H, Fisher ES. Overcoming challenges to US payment reform: could a place-based approach help? JAMA. 2018;319(15):1545-1546. doi: 10.1001/jama.2018.1542.