Delivery System Redesign

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.

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.

Across the country, states are increasingly capitalizing on a wave of momentum supporting multi-payer health system transformation. The federal government is building on existing state multi-payer activity, and spurring new public-private payment and delivery system reforms with initiatives like the State Innovation Models (SIM) program. This Multi-Payer Resource Center, a web-based toolkit, is designed to support states and others in answering key questions about convening, infrastructure, payment, attribution, and evaluation as they seek to implement multi-payer initiatives.

The best opportunity to pursue cost containment in the next five to ten years is through reforming provider payment to gradually diminish the role of fee-for-service reimbursement. Public and private payers have launched many promising payment reform pilots aimed at blending fee-for-service with payment approaches based on broader units of care, such as an episode or patients’ total needs over a period of time, a crucial first step. But meaningful cost containment from payment reform will not be achieved until Medicare and Medicaid establish stronger incentives for providers to contract in this way, with discouragement of nonparticipation increasing over time.

This report proposes system-wide health care reforms that could save the United States $300 billion dollars in the coming decade and $1 trillion over the next 20 years, as well as improve care quality and patient health. The report focuses on changes that will shift payment from the current fee-for-service payment models to models that are more person-centered.

In December 2012, AcademyHealth’s Research Insights project convened an expert meeting of leading academic researchers together with policy audiences to discuss how well physicians, organizations, and payers respond to and implement strategies to improve value in the U.S. health care system. Based on this discussion, a Research Insights report was released in April 2013. The report summarizes the meeting’s discussions from the different participant perspectives: payers, patients, and providers (including both clinical organizations and individual physicians). The report underscores the need for more precise performance measurement and better data as key issues for successful payment reform efforts. 

England, France, Germany, the Netherlands, and Sweden spend less as a share of gross domestic product on hospital care than the United States while delivering high-quality services. All five European countries have hospital payment systems based on diagnosis-related groups (DRGs) that classify patients of similar clinical characteristics and comparable costs. These European systems, discussed in more detail in the article, suggest potential innovations for reforming DRG-based hospital payment in the United States.

In an effort to improve both the affordability and quality of health care in America, key health care stakeholders from the insurance, hospital, physician, business, and consumer sectors—America’s Health Insurance Plans (AHIP), Ascension Health, Families USA, the National Coalition on Health Care, and the Pacific Business Group on Health—worked together to reach consensus about what is needed to control costs and improve quality. This blueprint highlights the group’s five recommendations for aligning incentives to transform care delivery and strengthen the infrastructure needed to achieve improved savings and health outcomes.

This article describes the Center for Medicare and Medicaid Innovation’s new rapid-cycle evaluation approach, which will assess its success at reducing expenditures and preserving or improving the quality of care provided to beneficiaries of Medicare, Medicaid, and the Children’s Health Insurance Program.