Innovative providers’ payment models for promoting value-based health systems: Start small, prove value, and scale up

Innovative providers’ payment models represent an important policy lever that could be used to promote value-based health systems. By bundling services across the continuum of care or to target acute events or chronic conditions, innovative payment models set financial incentives for providers to increase efficiency in service delivery, improve health outcomes and enhance patient experience with care. This paper offers insights on value-based payment models, a type of innovative payment model implemented in several OECD countries and reviews the publicly available evidence on the impact of those payment models on value. Innovative payment models tend to be exceptional and small-scale compared to activity-based payment models and have been extensively piloted in the United States while implementation and evaluation in other countries is limited. The publicly available empirical evidence points to modest efficiency and quality gains from value-based payment models. Impact on healthcare spending, outcomes and patient experience varies across programmes. Given the significant variation in the key features of value-based payment models and the context-specific issues they address, those models do not offer a one-size-fits-all solution. This paper outlines several intervention points that policy makers need to consider when designing and implementing value-based payment models to maximise their positive outcome.