Evidence of Effectiveness of Value-Based Purchasing is Mixed

The effectiveness of value-based purchasing programs in terms of improving quality of care is mixed according to a recent RAND Corporation report. Previous research on these models, which is highlighted in the report, has yielded both modest improvements in quality in some cases and inconclusive results in others. Additionally, the report’s authors collected data, which focused on three forms of value-based purchasing—pay-for-performance programs, accountable care organizations (ACOs), and bundled payments—and, ultimately suggested a collaboration between value-based purchasing program sponsors and evaluators to create a list of lacking data and unanswered research questions with respect to these models.

Value-Based Purchasing Programs

Value-based purchasing programs were created in an effort to improve quality of health care and lower costs. The earliest versions of these programs were in the form of pay-for-performance programs, which reward physicians and other providers for reducing costs or improving quality measures. Recently, newer versions of the models in the form of ACOs and bundled payments have been introduced. The RAND report describes ACOs as groups of physicians and other providers who “agree to coordinate efforts and be responsible for the overall cost and quality of care for a group of patients.” Bundled payment programs offer fixed payments set by a group of health care providers by averaging costs of bundled services.


Most of the research collected by RAND and most of its own data rested on pay-for-performance models as these programs have been in existence for a longer period of time. The report found that the data and previous research for ACOs and bundled payments was limited because many of these programs have just begun to be implemented. To conduct the study, the RAND researchers evaluated and reviewed the design features of 129 value-based purchasing programs, a majority of which were pay-for-performance models yet the sample also included some ACOs and bundled payment initiatives. The report also compiled previous research from previous value-based purchasing model studies. Finally, the RAND study enlisted a panel of experts to comment on the gathered evidence and recommend strategies.

Findings and Recommendations

With regard to the design features of evaluated systems, the report’s authors found that it was difficult to determine if newer models of value-purchasing payments would be effective since those more modern initiatives rely on complex redesigns of previous models, the sharing of information, and the absorption of risk by providers. Similarly, previous research was found to be limited to mostly research exclusively focusing on pay-for-performance models and not ACOs or bundled payments. Yet, even those studies contained design flaws that made it impossible to determine whether the purchasing models or other outside forces were affecting health care costs and quality. As such, the report called for a joint effort by value-based purchasing program sponsors and critics to create a list of specific research areas for the future.