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During the past year, the pandemic strained the entire health care system. Many health care providers experienced significant disruptions with reductions in use and lower revenue. Some providers were able to weather the crisis by relying on the organizational competencies they had built for value-based payment models. Providers in more advanced payment models had more financial resilience against the reductions in in-person volume.
Now that the pandemic is starting to wane, concerns about health care spending are returning. We are now at a point where the Medicare Trust Fund is closer than ever to exhaustion, while enrollment in Medicare and Medicaid has continued to grow. Prior to the pandemic, experts estimated that Medicare expenses would grow more than 7 percent in 2020. Value-based payment models continue to be viewed as mechanisms to address rising health costs.
With this as the backdrop, the value-based payment movement has entered a crossroads. The Medicare Shared Savings Program (MSSP) paused new accountable care organization (ACO) entrants for 2021, and the move to two-sided risk was delayed because of the pandemic. More recently, new leaders for the Centers for Medicare and Medicaid Services (CMS) and Center for Medicare and Medicaid Innovation (the Innovation Center) have expressed their strong commitment to value-based payment and care transformation—while delaying some of the most recent advanced payment reforms (for example, Geographic Direct Contracting, Primary Care First’s Seriously Ill Population, Kidney Care Choices).