Does Paying For Value ‘Work’?

I had a recent discussion with a community hospital chief executive officer (CEO) who said that value-based reimbursement (VBR) isn't working. At least, VBR isn't working for her hospital. Her take—the administrative costs of managing the VBR arrangements cost more than the return for delivering “value.” But she felt the hospital had to participate in these arrangements to get the payer contracts they needed.

Is her take on the VBR system correct? Can paying for value work for provider organizations? In general, I think the answer is yes, assuming the VBR model is designed correctly. But . . .