There is bipartisan agreement on the need to move from volume-based to value-based payment for health care providers. Rather than paying for activity, the aspirational goal is to pay for outcomes that take into account quality and costs. The Affordable Care Act (ACA) created the physician "value-based payment modifier," a pay-for-performance approach that, by 2017, will reward or penalize physicians based on the calculated value of care each provides to Medicare beneficiaries. This paper argues that although value-based payment is right aspirationally, in practice, it is impossible to accurately measure any physician's overall value. It recommends abandoning this approach and using performance measurement more strategically to support approaches to complement fundamental payment reform.
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