How Different Payment Models Support (or Undermine) a Sustainable Health Care System: Rating the Underlying Incentives and Building a Better Model

Abstract

Summary There are many layers of payment in the health care system as a whole. The most salient nexus for creating the right incentives for utilization of care — and therefore the part of the system most in need of reform — is how funds flow from insurers to the organizations that deliver care. From the perspective of health care economics, the authors review the evidence around three leading payment models and rate each on criteria desirable to providers, payers, and patients. They recommend a better population-based payment model that applies to the Medicare accountable care organization program: provider premium support.