An array of initiatives in the health reform law, including determining what treatments work best for which patients in real–world settings—known as comparative effectiveness research—provides “a framework for building on what has been learned about factors that contribute to inefficient health care delivery by exploring, designing, testing and implementing new approaches to organizing and paying for care,” the analysis states.
“While there are no simple paths to improving the efficiency and value of health care, potentially productive avenues include improving the accuracy of fee–for–service payment systems while moving toward new payment models. Improvements to the fee–for–service system might include fixing distortions in the Medicare payment schedules that make certain services relatively more profitable than others; adjusting payments so that more–expensive services that are no more effective than alternatives are reimbursed at the level of the less–expensive service; and altering payments to encourage use of more–effective services and discourage use of less–effective ones,” the analysis states.
“Alternative payment models might include rewarding providers for care quality and efficiency—known as pay for performance—or paying groups of providers a flat fee to care for patients with certain conditions to create incentives to coordinate care and improve efficiency. Other possible policy paths include measuring and publicly reporting differences in quality of care across regions and, more importantly, across providers, and increasing enforcement against fraudulent and abusive billing practices,” the analysis concludes.
Written by Jill Bernstein, Ph.D., an HSC senior policy analyst; and James D. Reschovsky, Ph.D., and Chapin White, Ph.D., both HSC senior researchers, the new Policy Analysis—Geographic Variation in Health Care: Changing Policy Directions .