Value-based Care

Traditionally, hospitals have been reimbursed for each treatment or test provided to the patient. This method emphasizes the quantity or volume of care rather than focusing on quality of care. The value-based payment model is aimed at controlling the rising cost of health care and focusing on the quality of care provided to the patient. Where fee-for-service reimburses providers for each health care service provided, value-based care zeros in on the positive outcome of the patient’s treatment. Increased coordination between different providers reduces costly duplication of service and ensures that patients receive the highest quality of care and achieve the best possible outcome.

Forging the Path from Volume to Value

HAP continues to ensure that the move to a value-based payment approach improves patient care in a sustainable and efficient manner by advocating to:

  • Align measures among state, federal, and commercial payors
  • Ensure providers have data so they can assume risk and manage population health
  • Develop alternative value-based programs for rural health providers
  • Support expansion of telehealth services
  • Implement opportunities to integrate physical and behavioral health
  • Leverage existing population health initiatives to support state goals 

Pennsylvania Hospital Quality Incentive Program

Pennsylvania’s Hospital Quality Incentive Program (HQIP) is designed to incentivize acute care general hospitals that are enrolled in the Pennsylvania Medical Assistance Program’s Physical Health HealthChoices Program to improve the quality of health care services they provide. The state Department of Human Services developed this initiative to promote cost-effective, quality health care through an outcome and value-based payment structure.

Currently, the HQIP includes two measures:

  • Potentially preventable admissions
  • Opioid treatment after a visit to the emergency department


Pennsylvania Rural Health Model

One example of a current value-based model in the state is the Pennsylvania Rural Health Model. The Rural Health Model changes the way rural hospitals are paid in order to:

  • Provide predictable hospital finances, prevent hospital closures, and avoid the loss of hospital services and jobs
  • Reward hospitals financially for improving the health of communities and reducing the need for intensive—and expensive—acute care

The Pennsylvania Department of Health and the Centers for Medicare and Medicaid Innovation developed the model and, along with HAP, are supporting its pilot in Pennsylvania. The model is designed to kick start a virtuous circle of better health and less emergency and inpatient care—resulting in savings from the reduced health care spend.

HAP Contacts

For more information, contact Kate Slatt, vice president, policy & care delivery. Media inquiries should be directed to Chris Daley, vice president, strategic communications.


HAP News

May 16, 2024

U.S. Senate Hearing Focuses on Rural Health

Rural hospitals need support to address the unique challenges that threaten their ability to deliver care, a panel of experts testified before the U.S. Senate Finance Committee today.