Payment Reform in the Healthcare Industry

Among the topics that I discussed in introducing this blog series was healthcare payment reform. Interestingly, HHS announced last week (Jan 26:) that they are moving their payment model from traditional “fee for service,” seeking to achieve a target level of 30% alternative payment model quality initiatives by 2016 and 50% by 2018. This move has great promise -- however, the change needed to accomplish reduced cost and improved care/outcomes is significant. In an environment that has functioned in a fee for service model since its inception almost 50 years ago, implementation and change management are critical for success. This change must involve all players in the health care delivery, and within two days of the HHS announcement, payers and providers announced an alliance to promote a “Triple Aim”: better care, lower cost and better outcomes. These moves reflect tangible initiatives in government and industry to address the problem of high-cost but low-quality results that plague the US healthcare system, and will positively contribute to the growing transformation of healthcare. The Industry has already moved toward value based care and information sharing. The Industry also recognizes that the current practices of the fee for service model is unsustainable. They anticipate a change in reimbursement that will support longer term goals to reduce unnecessary services, share information securely, protect privacy and reform payments as the future of improved healthcare. The government will have to proceed carefully to implement a difficult change in reimbursement effectively, or such a move could delay the process and undermine trust in the provider/payor community. Along with a thoughtful and monitored rollout of payment reform, watching for program integrity and putting preventive measures in place to address waste, fraud and abuse in a new payment model will set a solid course for full implementation. As the benefits of transformation accrue to patients, providers and payors, the future of healthcare in America can move from high cost, low performance to improved outcomes with greater efficiency -- benefiting citizens across the board. Image courtesy of Gualberto107 at FreeDigitalPhotos.net