Getting value from health spending: going beyond payment reform

Area of Science:

• Health Services Research
• Healthcare Economics
• Health Policy

Background:

• Fee-for-service (FFS) payment models are criticized for incentivizing service volume and intensity, potentially driving cost inflation without promoting quality or care coordination.
• The National Commission on Physician Payment Reform recommends eliminating stand-alone FFS payment due to inefficiencies and problematic financial incentives.

Purpose of the Study:

• To critically evaluate current healthcare payment reform proposals.
• To identify essential, often under-emphasized, components for successful healthcare payment and delivery reform.
• To advocate for a more nuanced and holistic approach to transforming healthcare payment systems.

Main Methods:

• Expert opinion and analysis based on experience as Chief Medical Officers of a national insurer.
• Review of existing payment reform recommendations and their limitations.
• Identification of critical success factors for healthcare transformation.

Main Results:

• Most payment reform proposals are considered both too broad and too narrow in their scope.
• Key missing or under-emphasized elements include: the local nature of healthcare, the need for upgraded performance measures, monitoring for unintended consequences, utilizing a diverse set of reform tools, and ensuring delivery system readiness.
• A holistic perspective acknowledging healthcare as a complex adaptive system is crucial.

Conclusions:

• Transforming healthcare payment requires more than simply moving away from fee-for-service.
• Successful reform necessitates addressing the local context, improving performance metrics, anticipating and mitigating unintended consequences, employing a comprehensive strategy, and aligning payment with delivery system capabilities.
• A systems-thinking approach is vital for achieving meaningful improvements in patient care and health system performance.