Provider Payment Incentives and Delivery System Reform

Book Chapter
October 2008
Paul B. Ginsburg

Recent analyses by the Congressional Budget Office and others have shown that the long-term federal budget outlook is dominated by spending trends in Medicare and Medicaid. These trends cannot be addressed in the long term without changes in the entire health care delivery system that slow spending increases by promoting more efficient delivery of care and more judicious choices about incorporating new medical technologies into the system.

Health practitioners, such as physicians, and provider organizations, such as hospitals, seek to serve patients in an efficient and high-quality manner. They also respond to financial incentives embedded in the structure of payment rates for their services. Provider payment rates play an important role in how well the health care delivery system is able to supply quality, efficient care.

Key policy recommendations:

Free access to this chapter—and the rest of the book titled The Health Care Delivery System: A Blueprint for Reform—is available at the Center for American Progress Web site.