In the context of growth in healthcare costs in the US, payers and providers continue to design and test care delivery and financing models that aim to incentivize value over volume, shifting away from reimbursement based on how many services were provided to paying for better outcomes achieved at a lower total cost of care. With the goal of preventing illness, injury, and chronic disease complications that result in high utilization of high-cost services like acute hospitalization, value-based care (VBC) initiatives have largely focused on two domains: primary care as the central coordinating hub for managing patients’ overall health, and high-cost specialty areas like chronic kidney disease, heart disease, cancer, and orthopedics. Results have been mixed[1], pointing to the need to continue to evaluate and evolve value-based care models across the care continuum.

To this end, allied health domains, such as orthotics and prosthetics (O&P), may advance the goals of better care at lower costs. In this paper, Avalere establishes a framework of necessary but not sufficient conditions of successful VBC payment models and uses O&P services as an example to illustrate how VBC payment models can benefit from incorporating care that focuses on patients’ functional needs. The paper additionally provides an overview of different aspects of VBC, the role O&P professionals can play in VBC payment model implementation, and recommended actions researchers and stakeholders can take in preparation for VBC payment model adoption.

The expected growth in both O&P care and the implementation of VBC payment models, driven by the increasing number of individuals aging into Medicare, will likely drive policymakers and researchers to evaluate new applications of VBC payment models. The Centers for Medicare and Medicaid Services aim to have 100% of traditional Medicare beneficiaries in a value-based program by 2030. Similarly, a recent report demonstrated that more than 5.7 million Americans are living with limb loss or limb difference, a number expected to double by 2050.  As the population ages and the burden of chronic disease rises, demand for orthoses will continue to grow, with orthopedic devices projected to an expected compound annual growth rate of 3.36% over the next 4 years. Given the O&P profession’s focus on managing chronic conditions, preventing complications, and delivering personalized care, it is reasonably positioned to adapt to value-based payment models.

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Funding for this white paper was provided by the American Orthotic and Prosthetic Association. Avalere retained full editorial control.

[1] Leao, D. L., Cremers, H. P., van Veghel, D., Pavlova, M., & Groot, W. (2023). The impact of value-based payment models for networks of care and transmural care: a systematic literature review. Applied Health Economics and Health Policy, 21(3), 441-466.