More than 40 healthcare organizations based in Oregon have committed to advancing the adoption of value-based payment across the state.
In 2019, the Oregon State legislature created the Sustainable Health Care Cost Growth Target Implementation Committee and charged it with identifying mechanisms to lower the growth of healthcare spending in Oregon to a financially sustainable rate. Now, as part of that legislatively mandated initiative to contain growth in healthcare costs, payers and providers are working together to advance payment reform and move to value-based payments (VBP).
In January 2021, the Implementation Committee approved recommendations, including a set of principles to increase the spread of VBP models across the state as a strategy to improve quality and lower costs. These VBP principles form the basis of the Oregon VBP Compact, a voluntary commitment by payers and providers across the state to participate in and spread VBPs, meeting specified targets and timelines over the next four years.
Broadly, the agreement targets moving to 70 percent of payments following advanced value-based payment methods by 2024, and supports the work of the cost growth target program, which is beginning implementation this year.
The Compact is not a legally binding document and is jointly sponsored by the Oregon Health Authority (OHA) and the Oregon Health Leadership Council, already has 42 signatories. Signatories of the voluntary compact include the largest health systems and commercial insurers, along with public programs such as the Public Employees Benefit Board, among others.
With these organizations and Oregon’s Medicaid program, which contains value-based payment requirements, two-thirds of people in Oregon will receive healthcare from an organization that has committed to the value-based payment model, according to state leaders. The Compact’s principles direct signers to establish advanced value-based payment models with upside risk only, combined upside and downside risk, as well as prospective payment models, officials said.
“Extending the value-based payment innovations of our coordinated care model into the private sector on a voluntary basis is a huge step forward for high-quality, affordable care across Oregon,” said Jeremy Vandehey, director of the health policy and analytics division at OHA. “We believe this model—which will give providers the flexibility to ensure their patients receive the care they need—is the way forward for healthcare, and we applaud the signers of this compact for their leadership in taking this bold step. We see this as deeply intertwined with our cost growth target program, whose primary goal is to achieve savings for our state and its residents without sacrificing quality or access.
Becky Hultberg, president and CEO, Oregon Association of Hospitals and Health Systems, added, “Oregon’s hospitals have long been part of the work to move toward a system of value-based payments, and we support the compact because aligning incentives improves quality and value. "It’s a testament to healthcare leadership in Oregon that providers and payers representing two out of three residents in our state have signed on. When our goals are aligned around what’s best for the patient, we create an environment that sparks the innovation Oregon is known for.”
The Compact also makes clear that changes “should be designed to promote health equity, as well as to mitigate adverse impacts on populations experiencing health inequities,” and lays out a variety of strategies to achieve that goal, officials stated.
