Payment Reform

One of the four cornerstones of the Health Policy Center recommendations, payment reform addresses the change that must occur in the way providers are paid in order to improve health and minimize waste. Payment reform is the responsibility of private payers, the government and patients working with providers.

Specific recommendations

• Create payment systems that provide incentives for various providers to coordinate care, improve care and support informed patient decision-making.
• Pay providers based on value. (See "Create Value")
• Further develop and test models of payment based on chronic care coordination, shared decision-making and episode-based payment (i.e., one bundled fee for the physicians and hospital delivering acute care).
• Encourage Medicare to pay for value using innovative payment models.
• Make the case for private payment reform that rewards improvement in the health of the population.
• Create incentives for delivery models that provide care coordination.
• Create an independent health board (See "Provide Health Insurance for All")

Advantages

Waste reduction: Research from the National Academy of engineering shows that an estimated 30 to 40 percent of health care spending is associated with failures (i.e., duplication, poor communication) for which someone pays. A large portion of this waste could be reduced by paying for value.

Aligned incentives: Currently, payment systems reward volume, not value. Paying for value rewards providers for producing the desired result: great outcomes, safety and service at an affordable cost over time.