Delivery System Redesign

In the United States, per capita spending on health care is more than double that in most other high-income, industrialized countries, including Australia, Germany, Japan, and Sweden. Yet performance on many health outcome measures in the U.S. lags these lower-spending nations. A New England Journal of Medicine Perspective examines two effective cost-containment strategies from abroad: Germany’s bundled payment system and Japan’s volume-driven pricing adjustment.

This Neiman Report highlights two of several emerging models being developed by the Harvey L. Neiman Health Policy Institute designed to align provision and payment of specialty care with efforts to ensure a sustainable, high quality health care system.

Bundled payment is the concept of paying a fixed dollar amount to cover a set of services, as an episode of care over a defined period. Because of the fixed price, providers are encouraged to hold variable costs down; yet BP programs usually require providers to satisfy a minimum set of quality metrics in order to receive payment, thus ensuring providers do not skimp on care. This paper examines issues confronted by two AF4Q communities that are considering or implementing BP initiatives.

States looking to implement accountable care organizations in Medicaid understand that payment reform alone is not sufficient to transform care delivery at the practice site level. Primary care providers, particularly those serving the health care safety net, require resources and guidance to meet the substantial quality and cost containment aspirations of the accountable care model. This brief outlines the types of technical assistance supports that state Medicaid agencies can potentially offer to help providers in transforming care delivery. It also provides key considerations for planning, implementing, and sustaining such technical assistance.

Under the Affordable Care Act and other health reform initiatives, the federal government has begun implementing policies to encourage hospitals to reduce preventable readmissions of patients. Each of the policies holds hospitals primarily accountable for readmissions and assesses performance using risk-standardized readmission rates. Commonwealth Fund–supported researchers examined the change in readmission rates over a two-year period and the relationship between these rates and other commonly used measures of hospital quality.