IMPORTANCE In 2010, the Veterans Health Administration (VHA) began implementing the patient-centered medical home (PCMH) model. The Patient Aligned Care Team (PACT) initiative aims to improve health outcomes through team-based care, improved access, and care management. To track progress and evaluate outcomes at all VHA primary care clinics, we developed and validated a method to assess PCMH implementation.OBJECTIVES To create an index that measures the extent of PCMH implementation, describe variation in implementation, and examine the association between the implementation index and key outcomes. DESIGN, SETTING, AND PARTICIPANTSWe conducted an observational study using data on more than 5.6 million veterans who received care at 913 VHA hospital-based and community-based primary care clinics and 5404 primary care staff from (1) VHA clinical and administrative databases, (2) a national patient survey administered to a weighted random sample of veterans who received outpatient care from June 1 to December 31, 2012, and(3) a survey of all VHA primary care staff in June 2012. Composite scores were constructed for 8 core domains of PACT: access, continuity, care coordination, comprehensiveness, self-management support, patient-centered care and communication, shared decision making, and team-based care.MAIN OUTCOMES AND MEASURES Patient satisfaction, rates of hospitalization and emergency department use, quality of care, and staff burnout.RESULTS Fifty-three items were included in the PACT Implementation Progress Index (Pi 2 ). Compared with the 87 clinics in the lowest decile of the Pi 2 , the 77 sites in the top decile exhibited significantly higher patient satisfaction (9.33 vs 7.53; P < .001), higher performance on 41 of 48 measures of clinical quality, lower staff burnout (Maslach Burnout Inventory emotional exhaustion subscale, 2.29 vs 2.80; P = .02), lower hospitalization rates for ambulatory care-sensitive conditions (4.42 vs 3.68 quarterly admissions for veterans 65 years or older per 1000 patients; P < .001), and lower emergency department use (188 vs 245 visits per 1000 patients; P < .001). CONCLUSIONS AND RELEVANCEThe extent of PCMH implementation, as measured by the Pi 2 , was highly associated with important outcomes for both patients and providers. This measure will be used to track the effectiveness of implementing PACT over time and to elucidate the correlates of desired health outcomes.

Policy Points:r Public and private purchasers must create a "burning bridge" of countervailing pressure that signals "no turning back" to fee-for-service in order to sustain the momentum for value-based payment.r Multi-stakeholder coalitions must establish a defined set of quality, outcomes, and cost performance measures and the interoperable information systems to support data collection and reporting of value-based payment schemes.r Anti-trust vigilance is necessary to find the "sweet spot" of competition and cooperation among health plans and health care providers.r Provider and health plan transparency of price and quality, supported by all-payer claims data, are critical in driving value-based payment innovation and cost constraint. Context:In recent decades, practitioners and policymakers have turned to value-based payment initiatives to help contain spending on health care and to improve the quality of care. The Robert Wood Johnson Foundation funded 7 grantees across the country to design and implement value-based, multistakeholder payment reform projects in 6 states and 3 regions of the United States. Methods:As the external evaluator of these projects, we reviewed documents, conducted Internet searches, interviewed key stakeholders, cross-validated The Milbank Quarterly, Vol. 92, No. 3, 2014 (pp. 568-623) Emerging Lessons From Innovation in Value-Based Payment Reform 569factual and narrative interpretation, and performed qualitative analyses to derive cross-site themes and implications for policy and practice. Findings:The nature of payment reform and its momentum closely reflects the environmental context of each project. Federal legislation such as the Patient Protection and Affordable Care Act and federal and state support for the development of the patient-centered medical home and accountable care organizations encourage value-based payment innovation, as do local market conditions for payers and providers that combine a history of collaboration with independent innovation and experimentation by individual organizations.Multistakeholder coalitions offer a useful facilitating structure for galvanizing payment reform. But to achieve the objectives of reduced cost and improved quality, multistakeholder payment innovation must overcome such barriers as incompatible information systems, the technical difficulties and transaction costs of altering existing billing and payment systems, competing stakeholder priorities, insufficient scale to bear population health risk, providers' limited experience with risk-bearing payment models, and the failure to align care delivery models with the form of payment. Conclusions:From the evidence adduced in this article, multistakeholder, value-based payment reform requires a trusted, widely respected "honest broker" that can convene and maintain the ongoing commitment of health plans, providers, and purchasers. Change management is complex and challenging, and coalition governance requires flexibility and stable leadership, as market conditions and stakeholder enga...

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BackgroundGrowing interest in the promise of patient-centered care has led to numerous health care innovations, including the patient-centered medical home, shared decision-making, and payment reforms. How best to vet and adopt innovations is an open question. Washington State has been a leader in health care reform and is a rich laboratory for patient-centered innovations. We sought to understand the process of patient-centered care innovation undertaken by innovative health care organizations – from strategic planning to goal selection to implementation to maintenance.MethodsWe conducted key-informant interviews with executives at five health plans, five provider organizations, and ten primary care clinics in Washington State. At least two readers of each interview transcript identified themes inductively; final themes were determined by consensus.ResultsInnovation in patient-centered care was a strategic objective chosen by nearly every organization in this study. However, other goals were paramount: cost containment, quality improvement, and organization survival. Organizations commonly perceived effective chronic disease management and integrated health information technology as key elements for successful patient-centered care innovation. Inertia, resource deficits, fee-for-service payment, and regulatory limits on scope of practice were cited as barriers to innovation, while organization leadership, human capital, and adaptive culture facilitated innovation.ConclusionsPatient-centered care innovations reflected organizational perspectives: health plans emphasized cost-effectiveness while providers emphasized health care delivery processes. Health plans and providers shared many objectives, yet the two rarely collaborated to achieve them. The process of innovation is heavily dependent on organizational culture and leadership. Policymakers can improve the pace and quality of patient-centered innovation by setting targets and addressing conditions for innovation.