Moving the Health Care System Away from Fee-for-Service

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<p>Many of the problems of the U.S. health system—fragmented care, variable quality, and high and rapidly growing costs—are rooted in fee-for-service payments, in which health care providers are paid per visit, test, or procedure. Not only does fee-for-service payment fail to provide incentives for efficiency, quality, or outcomes, it encourages the provision of unnecessary care and often discourages coordination of care across providers and settings. </p><p>In a <a href="/blog/2013/wielding-carrot-and-stick-how-move-us-health-care-system-away-fee-service-payment">new blog post,</a> Commonwealth Fund vice president Stuart Guterman lays out the policies needed to move the system toward alternative payment approaches. In addition to incentives and penalties, he calls on public and private payers to "flex their muscles" by working together to effect change. </p>
<p>"Both public and private stakeholders recognize that reengineering health care is preferable to rationing it," Guterman writes. "To ensure the sustainability of our health care system, we need to continue to pursue alternative payment approaches while coordinating our efforts to maximize their effectiveness. The potential benefits are too great, and the alternative is simply unacceptable." </p>