The Need for New Cost Measures in Pediatric Value-Based Payment

* Abbreviations: APM — : alternative payment model InCK — : Integrated Care for Kids TCOC — : total cost of care Value-based payment reform is gaining momentum as health care stakeholders seek to reduce costs and improve quality. Reforms have not been evenly distributed, with most alternative payment models (APMs) being focused on adults. The relative lack of child-focused APMs represents a missed opportunity. Early life interventions can improve children’s cognitive and behavioral development, resulting in reduced costs over a lifetime; however, such interventions require new financing models to be sustainable.1 The Center for Medicare and Medicaid Innovation’s recent Integrated Care for Kids (InCK) Model, which requires APM development to support the integration of health care and other family-serving sectors, offers new momentum for child-focused payment reform.2 To capitalize on the reform opportunities, new cost measures for APMs are needed that better capture the value of children’s healthy development and promote greater investment for preventive interventions during this critical life stage. Cost measures play a vital role alongside quality measures in shaping the incentives within an APM. Cost-of-care measures capture the total spending on health care services for a specific duration of time, population, or care setting. APMs use cost measures to ensure that the total amount paid out is not more than what would otherwise be spent absent the APM. For example, the total cost of care (TCOC) captures the total spending for a patient population over a certain duration … Address correspondence to Nathaniel Z. Counts, JD, Mental Health America, 500 Montgomery St, Suite 820, Alexandria, VA 22314. E-mail: ncounts{at}mhanational.org