PCMH and VBID will be what realigns incentives on the delivery and demand sides to improve health care quality. The follow is from http://www.pcpcc.net/files/vbid.pdf

Aligning Incentives and Systems - Promoting Synergy Between Value-Based Insurance Design and the Patient Centered Medical Home

VBID (Value-Based Insurance Design) is an employer-driven benefit design strategy to optimize use of higher-value health care services and reduce use of lower-value services. The goal is to generate
better results from employer health care expenditures.
The underlying premise of VBID is getting more out of
the health care dollar by removing barriers for essential,
effective services. VBID is a demand-side initiative that
focuses on patient incentives to enhance use of medical
services of proven value.
-Poor health care costs money.
- True cost is more than just health care expenses.
- Employees are influenced by out-of-pocket costs and incentives.

1. Design by service. Waive or reduce copayments
or coinsurance for select drugs or services, such as
statins or cholesterol tests...
2. Design by condition. Waive or reduce copayments
or coinsurance for medications or services, based on
the specific clinical conditions with which patients
have been diagnosed.
3. Design by condition severity. Waive or reduce
copayments or coinsurance for members with a
particular condition who are believed to be at high
risk for excessive health care costs in the near future.
4. Design by disease management participation.
An extension of the third design approach, this
VBID solution provides reduced or waived
copayments or coinsurance to high-risk members
who actively participate in a disease management
program.

(For example) IBM recently announced
that it will cover all primary care and preventive
services with no copayment, a clear sign that the company
is investing in a preventive strategy.

VBID is most effective as an information-driven endeavor
based on either the employer’s data or the use of predictive
modeling tools. For the most part, the more effort
expended to ensure the right population is receiving the
benefit, the more likely that group is to have improved
health outcomes as a result of the VBID design.

VBID is a value purchasing strategy, not simply
a low-cost purchasing strategy.

The PCMH (Patient-Centered Medical Home) is a supply-side mechanism to enable clinicians
to deliver better-quality care more efficiently. The PCMH
fosters relationships between patients and providers,
improves access and increases quality and consistency of
care. PCMH incorporates re-created office processes and
payment systems to reward an ongoing physician-patient
relationship and high-quality, coordinated care. The
PCMH requires an investment in financing, through either
up-front payments or redesigned reimbursement, to help
providers implement and sustain the model. Through
better information management, use of guidelines and
coordinated care, the PCMH theoretically may contribute
to better quality, which in turn drives cost reductions
through avoided hospitalizations and emergency
department visits.

The PCMH fosters relationships between patients
and providers, improves access, and increases quality and
consistency of care. PCMH incorporates re-created office
processes and payment systems to reward an ongoing
physician-patient relationship, which may also improve
physician and patient satisfaction.

In addition to enhanced infrastructure, the PCMH
incorporates payment reform. It shifts funding back to
primary and preventive care and reduces costs of higherintensity
services. A high-quality, coordinated medical
home can help patients avoid hospitalizations and
emergency department visits, thereby reducing costs.

Patients do not routinely receive high-quality care.
Patient-physician partnerships are important to care
outcomes.
Information management is essential to care coordination.

The medical home is widely discussed in the current health
care reform debate. Several early demonstrations have
shown significant improvements over traditional models
of care.

...even the best designed
benefits cannot succeed at improving
health outcomes unless the care delivered is
outcomes-driven, efficient and evidence-based.
Further, unless care is delivered in a systematic
manner, wasteful redundancies and
readmissions will make benefits progressively
more cost prohibitive—and also take a toll...

The current reimbursement model for primary care
practitioners does not pay for qualitative services and
enhanced care management, and has become a de facto
financial disincentive to delivery of primary care services.
Like VBID, PCMH incorporates financial incentives to act
as levers that promote delivery of appropriate, valued
health care services. In this case, provider payments reward
coordinated care focused on early intervention and
prevention. Physician incentive payments in the medical
home model encourage provider adoption of integrated
systems for tracking and delivering evidence-based care.
This contrasts with the current system that rewards volume
of care and specialty care services and offers physicians no
capital for investment in information technology. Medical
home initiatives reengineer health system incentives to
shift care to information-driven care.

The basic premise of a clinically
nuanced design is that when barriers to high-value
medical services are kept low, more health is
achieved at any price point.

This nation is in the throes of debate on health care
reform. While there is little agreement on the specific
mechanisms, there is general consensus that the health
care system is not delivering acceptable value in clinical
outcomes for the dollars spent. Many of the solutions
proposed are highly consistent with the underlying
principles of VBID and PCMH:
• Better delivery of evidence-based practices
• Increased reliance on information management
in health care
• Cost sharing and reimbursement aligned with
high-value services
• Coordinated, multidisciplinary care
• Increased engagement of and attention to patients