The Business Case for Population Health Management

American health care is shifting from a fixed-cost, fee-for-service payment model to value-based payment, in which providers including physicians and hospitals increasingly face incentives to reduce the total cost of care and meet specific quality benchmarks. Leaders of organizations that pay for health care and employers have encouraged this shift in response to substantial increases in health care costs and generally mediocre health outcomes compared with other countries. Here, we make the case that although the pace and details of such payment reforms are uncertain, these underlying structural economic challenges make a transition to some sort of value-based care inevitable.