Get Smart on Payment Reform

By Rosana Garcia

money_016_01What is payment reform?  What types of payment alternatives are being discussed?  How does it affect the consumer experience in health care?  Why is it important?

Payment reform in health care focuses on controlling or lowering costs without sacrificing quality.  Currently, most health insurance plans pay providers for each service that they provide—the fee for service model.  Many critique this system as rewarding volume of services—more appointments, more tests, more procedures—without really making sure it’s in the patient’s best interest. 

The fee for service model is also very expensive, as providers have a financial incentive to order more services.  Payment reform examines how the payment structures in health care might be shifted to control our increasing costs, improve patient care and increase positive health outcomes.

While the Affordable Care Act (aka Obamacare) has worked to increase access to health insurance for many, there is still critical work to do in making sure that costs of care are manageable.  Individuals, insurance companies, providers, and the government all struggle with this problem.  Getting a handle on payment for health care services is important because it is such a large problem—and one that affects everyone within the health care system.

I found that a recent webinar sponsored by the CT Health Policy Project was extremely helpful in sorting out the different types of options being discussed for payment reform, and a good place to start examining this complex topic.

Provider Payment Reform Options: Aspiration Meets Reality, with Bob Berenson, MD, of the Urban Institute, explores the many payment structures in the health care landscape, including the pros, cons, and key challenges of each model.  Berenson discusses the classic fee for service model, as well as per person per month (capitation), shared savings, bundled episodes, and pay for performance models.

Click here for the webinar video.

Click here for the webinar slides (in PDF format).

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Want to learn even more about payment reform?  Here’s a start with some resources:

Payment Reform at the Robert Wood Johnson Foundation

Catalyst for Payment Reform (CPR) has some great publications that get into more detail​

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