Nursing Home Value-Based Payment Failures Can Inform Future Success

Implementation of a National Academies of Science, Engineering, and Medicine recommendation to improve substandard care in US nursing homes by expanding value-based payments needs to consider lessons learned from previous value-based payment attempts, according to a paper published in Public Policy & Aging Report.

“Unfortunately, most of the models tested to date have not shown improvements in the quality of nursing home care,” wrote corresponding author Debra Saliba, MD, MPH, AGSF, of the Borun Center for Gerontological Research, University of California Los Angeles, Los Angeles, California, and coauthors.

The article reviews various value-based payment initiatives in US nursing homes dating back to the 1980s. Despite a study that found improved outcomes at a lower costs with incentive payments at several San Diego nursing homes, federal efforts to test value-based payments lagged for another 2 decades. Since then, consistent success has been elusive.

Problems with previous value-based payment models have included rewarding nursing homes on too limited a set of quality measures, which has driven concerns that providers may focus on rewarded measures to the detriment of unrewarded factors. Another consideration is how to incentivize the growth of successful pay-for-performance, or P4P, models.

“An old line suggests P4P often stands for ‘pennies for performance’ in many models, offering weak incentives to motivate providers to improve quality,” the authors wrote. “Meaningful payouts for quality improvement and performance need to be ensured.”

According to the piece, aligning nursing home payments with quality of care must promote health equity rather than worsening disparities of historically marginalized populations and resident/family satisfaction.

“The right payment model will require incorporating elements of the resident experience, getting the mix of quality measures included in the incentive payment correct, incentivizing participation and program retention, and promoting health equity across nursing homes nationwide,” the authors advised.

Reference

Grabowski DC, Chen A, Saliba D. Paying for nursing home quality: an elusive but important goal. J Am Geriatr Soc. 2023;71(2):342-348. doi:10.1111/jgs.18260