HHS announces timeline for payment reform
March 14, 2015
Last week, I noted how Medicare sets prices for procedures. Fortunately, the U.S. Department of Health & Human Services (HHS) announced earlier this year that they will be overhauling how healthcare providers will be paid. The goal is to move away from fee-for-service, where providers are paid by volume (the more they do, the more they are paid, regardless of whether the patient needed the procedures) and instead move towards "value-based payments" where the patients' outcomes are considered.
This move makes a lot of sense, although hopefully the metrics will be refined as the transition gets underway. HHS announced a goal of tying 90% of hospital payments to quality and value metrics by the end of 2018, which might seem aggressive -- however, hospitals have seen movement towards this model for several years now. It'll be interesting to see how the payment model and quality metrics change for doctors over time.