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Scaling Up Payment Reform Pilots Key to Health Care Cost Containment

Sticks for Providers and Carrots for Patients Needed to Move Payment Reform Forward

Media Advisory
May 6, 2013

Alwyn Cassil (202) 264-3484 or

WASHINGTON, DC—Scaling up health care payment reform to control costs and improve quality will require both sticks to prod providers from the sidelines and carrots to guide patients to more-efficient, higher-quality doctors and hospitals, according to an article by Paul B. Ginsburg, Ph.D., president of the Center for Studying Health System Change (HSC), in the May Health Affairs.

“The best opportunity to pursue cost containment in the next five to ten years is through reforming provider payment to gradually diminish the role of fee-for-service reimbursement. Public and private payers have launched many promising payment reform pilots…. But meaningful cost containment from payment reform will not be achieved until Medicare and Medicaid establish stronger incentives for providers to contract in this way, with discouragement of nonparticipation increasing over time,” according to the article, which was supported by the Alliance for Health Reform and the National Institute for Health Care Reform. At the same time, encouraging patients through financial incentives to choose higher-performing providers can help control costs.

“Ending fee-for-service payment…once and for all is unlikely to be feasible for quite some time, but gradually increasing disincentives for providers that do not participate in reformed payment approaches is a practical way to move forward. Reformed payment models will also need to increasingly engage beneficiaries, in both the public and the private sectors, to drive patients to providers that are more efficient and deliver higher quality care,” the article concludes.

The article, titled, “Achieving Health Care Cost Containment Through Provider Payment Reform That Engages Patients and Providers,” is available online here.

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The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely research on the nation's changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is affiliated with Mathematica Policy Research.



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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.