Many of the problems with 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.
In a new blog post, 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.
