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Learning Objectives

  1. Describe quality concepts in performance-based payment models.

  2. Explain current performance-based issues facing community pharmacies.

  3. Apply strategies to improve performance scores in the community pharmacy setting.

Setting the Scene

Imagine taking your car to the mechanic because it won’t start. He takes a look at it, and says that you need a new alternator. He also mentions that while he was looking at your car he noticed you needed a new air filter and your brake fluid changed. When you get the bill, you notice you were charged a fee for each item replaced as well as the mechanic’s time. You need your car to be able to get to school and work, so you pay the bill. This type of transaction is how a fee-for-service healthcare model works.

Now imagine getting in your car several days later to head to school, and it won’t start again. You remember that your mechanic provides a warranty on his work. You go back to the same mechanic, who then reassesses your car and realizes that the alternator was faulty and replaces it. Because the part is covered by the warranty, he doesn’t charge you for the new alternator or his time. This payment is based on the quality of the services provided and is therefore only paid based on the initial services provided, which had an agreed upon quality of service (i.e., the warranty). This is similar to how a value-based care model works. Throughout this chapter, you will learn how the United States’ healthcare system has shifted toward a value-based care model and the impact this has had on community pharmacy.

Excessive spending and insufficient quality have driven calls for healthcare reform in the United States. As of 2019, 17.7% of the U.S. gross domestic product was spent on healthcare, far exceeding spending by other industrialized nations.1 Additionally, reports comparing the United States to other countries find the United States lacks healthcare quality, particularly on issues related to equity and access.2,3 Using the car example above, the United States is getting “lemon” quality while paying a luxury car price. The concept of value, generally defined as quality divided by cost, is used to describe this fundamental problem of the U.S. healthcare system. Current healthcare reform efforts, such as value-based purchasing and ACOs, focus on efforts to maximize value by improving quality while simultaneously reducing costs. These efforts impact both community pharmacists and hospital pharmacists directly through performance-based payment models. Regardless of setting, quality has become a feature of pharmacy practice today.


When thinking about healthcare quality measures, it is helpful to think about it in terms of a framework. Donabedian’s structure, process, and outcome (SPO) model is a common categorization scheme (Table 10-1).4 Structure pertains to tangible or intangible static attributes of the ...

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