27 September 2016 - Alternatives to fee-for-service payment in the US are becoming more widespread. The idea is to provide aligned financial support for reforms in health care that improve quality and efficiency.

For example, many health care organizations have found that analyzing current treatment patterns and redesigning care pathways can enable more patients to be more engaged in their care and more effectively treated in outpatient settings or in their home. The new care models often use care teams, digital health tools that enable better monitoring and intervention, and considerable investments in analytics and support systems—all of which are generally not well supported under fee for service (FFS). The models can potentially help ensure the appropriate use of costly technologies that are usually covered under FFS, such as breakthrough drugs and devices, which are under increasing pressure to demonstrate value in practice or face restrictions on access.

Many payment reforms, like Medicare’s new Merit-Based Incentive Payment System (MIPS) for physicians, involve adjusting FFS payments to better reflect the value of the services or treatments provided. But an increasing number of reforms involve alternatives that link at least a portion of payments to measured performance at the patient level—quality and cost for broader episodes of care or the overall results for a population of patients.

The recent Medicare physician payment law provides a 5% bonus payment to physicians practicing in organizations that are “advanced” in the shift from FFS to payments with accountability for overall quality and total costs.

Read JAMA Viewpoint