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AFL-CIO Now

Buying Value, not Volume, Lowers Health Care Costs

Illustration by Tax Credits/Flickr

The AFL-CIO, several unions, employer groups and a number of large corporations—all major purchasers of health care benefits—are working together to bring down the cost of health care and improve quality through a new Buying Value initiative.

The goal is to change the way health benefits are purchased, away from volume to value. Buying Value is designed to encourage and assist private purchasers in making the switch from paying for care based on the number of individual tests or procedures performed to a payment model based on the value or outcome of the overall care.

Medicare, the nation’s largest buyer of health benefits, is shifting toward value purchasing as part of the Affordable Care Act. Helen Darling, president and CEO of the National Business Group on Health, says, “Medicare’s shift toward value purchasing changes the entire landscape for purchasing health care.”

Buying Value’s sponsoring organizations have been working independently to transform health care for a number of years. But, with the nation’s largest and most powerful health care purchaser, Medicare, now joining us in that effort, the chances that value purchasing will rapidly spread throughout the health economy and among employers, health plans and health funds are much, much better today.

The Buying Value project will develop a toolkit to help private purchasers rethink their health plans, as well as launch a public database showing different payment methods that purchasers can use to drive improvements in health care quality and safety. Organizers also will provide educational and presentation materials on the issues and conduct outreach at the local level to educate regional purchasers and consumer organizations.

 Click here to learn more.

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