The Medicare program may soon adopt value-based purchasing (VBP), in which hospitals could receive incentives that are conditional on meeting specified performance objectives. The authors advocate for a market-oriented framework and direct measures of system-level value that are focused on better outcomes and lower total cost of care. They present a multidimensional framework for measuring outcomes of care and a method to adjust incentive payments based on efficiency. Incremental reforms based on VBP could provoke transformational changes in total patient care by linking payments to value related to the whole patient experience, recognizing shared accountability among providers. Measures are fundamental to the Medicare hospital VBP program because they M e d i c a r e P u r c h a s i n g H E

New health care delivery and payment models in the private sector are being shaped by active collaboration between health insurance plans and providers. We examine key characteristics of several of these private accountable care models, including their overall efforts to improve the quality, efficiency, and accountability of care; their criteria for selecting providers; the payment methods and performance measures they are using; and the technical assistance they are supplying to participating providers. Our findings show that not all providers are equally ready to enter into these arrangements with health plans and therefore flexibility in design of these arrangements is critical. These findings also hold lessons for the emerging public accountable care models, such as the Medicare Shared Savings Program-underscoring providers' need for comprehensive and timely data and analytic reports; payment tailored to providers' readiness for these contracts; and measurement of quality across multiple years and care settings.