OVERVIEW
The current system of payment does not reward physicians and hospitals for improving quality or lowering costs. Rather, it encourages inefficient use of resources and even waste. As long as the U.S. continues to spend significantly more per capita than other countries without producing superior outcomes, there is a powerful need to scrutinize how the incentives and rewards in the health care system can be altered to produce better value.
The current system of payment does not reward physicians and hospitals for improving quality or lowering costs. Rather, it encourages inefficient use of resources and even waste. As long as the U.S. continues to spend significantly more per capita than other countries without producing superior outcomes, there is a powerful need to scrutinize how the incentives and rewards in the health care system can be altered to produce better value.
CORE CPR PRODUCTS
CHALLENGES
While there is significant momentum aimed at reforming the payment system, several noteworthy issues exist:
- Limited Coordination Among Current Efforts: There is a lack of coordination within the private sector and between public and private sectors needed to effectively drive system reform. Today, there are more than 300 Pay-for-Performance (P4P) programs underway in the private sector and more than 50 Medicare Demonstration projects. An analysis of the P4P projects in markets across the country has shown that many discrete initiatives exist within the same market, with limited coordination or dialogue between the sponsors.
- Momentum Is Moving Faster Than The Evidence: There are currently hundreds of initiatives and demonstrations being implemented with limited evidence about what works, what does not work, where, and why. The value demonstrated by current efforts is often not consistently evaluated or broadly disseminated and the impact of programs are often limited due to the fact that existing performance-based payments are small and well below the cost of change.
- Lack of National Framework: While many experts agree that there is no ‘silver bullet’ for reforming payment, there is no clear national strategic framework supported by key stakeholders that can be used to collectively advance the effort.
- No ‘One Size Fits All’: To achieve the goal of improved value, payment reform will likely need to take different forms across and within markets. Effective payment reform will need to take into account various market dynamics including, but not limited to, existing market conditions, delivery system organization, history of experience with payment initiatives, regulatory environment and culture, etc.
There is reason to believe that if we follow our current course, the consequence will be increasing over-lapping and conflicting payment schemes. Coordinated action by purchasers and other stakeholders can create the opportunity to catalyze change.
