Payment reform is necessary to increase value in healthcare due to the current fee-for-service model, which emphasizes quantity of care over quality. Fee-for-service payment incentivizes providers to deliver more procedures and tests that may not actually improve patient outcomes or reduce costs. Payment reform shifts the focus away from volume and toward providing high-value, cost effective care. This can be achieved through various models such as alternatives to fee-for-service such as Accountable Care Organizations (ACOs). ACOs provide incentives for providers to coordinate care, engage patients in their own health management, and create efficiency in order to achieve better health outcomes while reducing costs.
One example of a successful ACO is Geisinger Health System’s Proven Care program in Pennsylvania which offers bundled packages with fixed prices for select services. In this case a 6 month follow up service bundle after open heart surgery was offered with a 90 day warranty period where any complications during that time would be covered without additional cost. The Proven Care program created an incentive for providers and hospitals within the system by rewarding them based on how well they met quality standards rather than just paying for each procedure or test performed individually. Additionally, it resulted in improved outcomes among patients who underwent surgery within the system because there was increased coordination amongst specialists, access to data about past treatments and outcomes which enabled physicians to make better decisions when treating their patients resulting in lower readmission rates and mortality rates despite higher volumes of surgical procedures being done at Geisinger than ever before .