The section on Quality Improvement addresses the full range of public and private sector approaches to improving quality within the health care industry. This page focuses more narrowly on the evidence that selected quality improvements will produce net savings in health spending either in the short-run or long run.
- How to Pay for Health Care. “In this article, the authors argue that although capitation may deliver modest savings in the short run, it brings significant risks and will fail to fundamentally change the trajectory of a broken system. The bundled payment model, in contrast, triggers competition between providers to create value where it matters—at the individual patient level—and puts health care on the right path. The authors provide robust proof-of-concept examples of bundled payment initiatives in the U.S. and abroad, address the challenges of transitioning to bundled payments, and respond to critics’ concerns about obstacles to implementation.” (Harvard Business Review, July-August, 2016)
The Case for Capitation. “Under this approach, providers receive a fixed per person (or “capitated”) payment that covers all health care services over a defined time period, adjusted for each patient’s expected needs, and are also held accountable for high-quality outcomes. It’s the only payment system that fully aligns providers’ financial incentives with the goal of eliminating all major categories of waste. It fundamentally shifts the role of managing the amount, form, and cost of care from insurers to medical practitioners. It also ensures that providers receive enough of the savings that they can afford to fund the changes needed to bring down costs. A population-based payment model also has major implications for pure health insurers: Because it removes care oversight from their purview, it leaves them only traditional insurance functions such as claims processing, risk analysis, reinsurance, marketing, and customer service.” (Harvard Business Journal, July-August, 2016)