In an editorial published in a recent issue of the New England Journal of Medicine, Fund president Karen Davis explores alternatives to the current fee-for-service payment system, which she says is a barrier to effective, coordinated, and efficient care.
According to Davis, fee-for-service rewards overuse and duplication of services, as well as the provision of costly, specialized treatment. Moreover, it fails to reward providers for keeping patients from being hospitalized, or rehospitalized, or for helping patients control and monitor a chronic condition.
Davis examines new approaches that base payment on the total care a patient receives during an episode of illness or a defined period. Creating a global fee for "care episodes," with adjustments made for the complexity of care provided, would properly reward providers who provide effective, lower-cost treatment, she writes.
Another option that could lower costs and improve care is basing payment around a "medical home"—a physician practice or clinic where a patient regularly goes for care. Research shows that receiving well-coordinated care from a regular provider is associated with better health outcomes and lower total costs. When patients are cared for by multiple physicians, costs are higher—as are the chances for medical error.
Any new payment method, Davis notes, would need to undergo testing and rigorous evaluation before it could be implemented on a wide scale.