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Health Policy Issue Brief: Recommendations for Acute Care Delivery and Payment Reform

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Several factors are driving health care providers and facilities, including acute care providers to shift away from prevalent fee-for-service (FFS) payments to value based payment models. Alternate payment models (APMs) are designed to support services that are not traditionally covered under FFS to lead to better coordination of care and higher value care delivery. A move from FFS to APMs requires careful consideration and promulgation of disruptive reforms that encourage more efficient use of existing services, better care coordination, and more effective and efficient acute care while preserving the core functions that acute care facilities provide in their communities. Examples of short-term delivery reforms that can support this transition are creating care plans for high risk patients to help address underlying needs and interoperable health technology to query health records during an acute care episode.

To support a movement away from FFS, a potential range of APMs can be utilized such as partially capitated payments, bundled payment for episodes of acute care, or global budgets with full capitation. These payments require that providers and organizations take on more accountability for the outcomes of their patients, giving them greater flexibility and the potential for higher net revenues from delivering care more efficiently, as well as financial risk if quality metrics are not met and overall cost growth is not slowed. In this paper, we describe several recommendations for moving away from FFS to APMs in acute and emergency care, specifically focused on increasing information sharing, changing payment to incentivize the right delivery reform, and patient engagement. Each category of recommendations presents a long term vision, with several short term implementation steps and examples to achieve this vision.

Jesse M. Pines

Former Brookings Expert

Director, Center for Healthcare Innovation and Policy Research - George Washington University School of Medicine & Health Sciences


Jennifer Wiler

Vice Chair and Associate Professor, Department of Emergency Medicine, University of Colorado Denver - Adjunct Professor in Health Administration, University of Colorado School of Business

Mark B. McClellan

Former Brookings Expert

Director, Margolis Center for Health Policy - Duke University

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