Engelberg Center for Health Care Reform

Payment and Delivery System Reform

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Medicare Payment Reform Project
The current payment system has failed to control growth in Medicare spending for physician services and is widely considered to be flawed. Because the fee-for-service (FFS) system more or less pays providers for what is done, it creates incentives to provide more services, even when less or less intensive care would be more appropriate. Moreover, Medicare pays providers equally regardless of their individual behavior or the quality of the care they provide. As a result, we have high volume and cost of care without the best possible outcomes.

There is now broad consensus that traditional FFS payment methods often do not support efforts by providers, consumers, and others to implement improvements in care and avoid unnecessary costs. For example, using health information technology to reduce duplicative or unnecessary services, collaborating with nurse practitioners or pharmacists in programs to help patients adhere to behavior changes and appropriate medications, finding more effective ways to integrate formal and informal caregiving for patients with multiple chronic diseases, and other steps to promote better-coordinated, personalized care are generally not reimbursed in fee-for-service programs.

The payment reform efforts now underway focus on creating financial incentives to provide appropriate and efficient care, mitigating the effects of the FFS payment system, and to encourage delivery systems of care that assume responsibility for patients across providers and settings over time. The Medicare Payment Reform Project is developing policy proposals that would reward providers for improving overall quality and efficiency of care. More broadly, the project aims to provide analysis of Medicare payment policy and generate ideas for reform to reward performance. Several proposals related to Medicare payment policy will soon be released.

Academic Medical Centers
The challenges facing the nation’s academic medical centers (AMCs), particularly those in urban areas serving a disproportionate share of lower-income and uninsured patients, require urgent attention. While AMCs have long been the cornerstone of both developing innovative treatments and ensuring access to care for Americans in need, technological, financial, and other trends are threatening their capacity. The Engelberg Center is leading a project that will review and assess the challenges and opportunities facing AMCs in the health care system of the 21st century.

The project will identify strategies and policies with the most potential for enhancing AMCs’ ability to support the goal of high-quality, efficient care for vulnerable populations, including through the use of innovative approaches to care delivery. More specifically, this project will develop options for reforming the role of AMCs with respect to providing care for vulnerable populations, developing targeted medical therapies, and financing medical education. These policies will describe how the “safety net” mission of AMCs can be sustained into the future.

As part of this work, we will conduct a high-level review of the academic and policy literatures on AMCs, convene an expert roundtable, and conduct selected empirical analyses of the current state of AMCs and options for the future. Among other activities, this will include a review of:

  • Promising financing and care-delivery reforms that are being implemented by AMCs and in other settings;
  • Strategies that are being undertaken by AMCs to close the growing gap between discovery and privately supported late-stage trials of innovative therapies; and
  • Policies for improving medical education to facilitate more effective training, more efficient use of federal and state funding, and broad-based support for implementation.

Advisory Board Members

Joel T. Allison, Baylor Health Care System
Anne Beal, The Commonwealth Fund  
Toby Cosgrove, The Cleveland Clinic
Ken Davis, Mount Sinai Medical School
Victor J. Dzau, Duke University Health System
Gary Gottlieb, Brigham and Women's and Faulkner Hospitals
George Isham, Health Partners
Thomas J. Lawley, Emory University School of Medicine
Edward D. Miller, Johns Hopkins Medicine
Russell Robertson, Northwestern University Feinberg School of Medicine
Nancy Schlichting, Henry Ford Health System
Reed Tuckson, UnitedHealth Group
Elaine Ullian, Boston Medical Center
Tom Valuck, Centers for Medicare and Medicaid Services

Mark Miller, Director of MedPAC, Ex-Officio Member

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