Reimbursement Reform

Creating Payment Systems to Accelerate
Value-Driven Health Care


There have been a number of efforts in recent years to create "pay for performance" systems that add new rewards or incentives to existing healthcare payment systems in order to encourage lower-cost, higher-quality health care.

But that's not enough. There is a growing consensus that in order to achieve the most efficient, effective, and sustainable improvements in quality and reductions (or slowing the growth) in costs, the penalties and disincentives in the underlying healthcare payment system must also be eliminated or modified.

The Network for Regional Healthcare Improvement (NRHI), of which PRHI is a founding member, has conducted in-depth analyses on this issue. For more information, refer to the NRHI Payment Reform Series.

The second report in the series, From Volume to Value: Transforming Health Care Payment and Delivery Systems to Improve Quality and Reduce Costs, provides an easy-to-understand explanation of the problems with current healthcare systems and describes alternative payment systems that offer solutions to those problems. The report shows how "episode-of-care" payment systems provide incentives for hospitals and physicians to coordinate their efforts in order to eliminate quality problems and improve efficiencies in care delivery. It also shows how "risk-adjusted global fees" can provide primary care physicians with the resources they need to help people with chronic diseases stay well enough to avoid preventable hospitalizations.