Payment reform, new delivery models to save trillions

With U.S. healthcare spending growing at its slowest rate, the Commonwealth Fund offers more good news. The independent research foundation concluded that quickly implementing payment and delivery reforms, such as pay-for-value and accountable care, could slow healthcare spending by $2 trillion over the next decade.

Of the potential savings, $1.33 trillion would come from payment reform, such as bundled hospital payments, according to the report released Thursday.

Implementing high-value care models, including patient-centered medical homes, accountable care organizations and integrated delivery systems, would save the U.S. healthcare system $189 billion over ten years.

And savings of $481 billion would be attributed to system-wide changes, such as reducing administrative costs and reforming malpractice policies, that improve the way healthcare markets function, the report noted.

To achieve significant savings, the Commonwealth Fund set an ambitious goal of keeping healthcare spending growth to no greater than the country's gross domestic product, all while improving performance.

"Stabilizing health spending and targeting it in ways that improve health outcomes would free up billions of dollars for critically needed economic and social investments as well as higher wages for workers," lead author Cathy Schoen, Commonwealth Fund senior vice president, said yesterday in a statement.

However, many of the recommendations will require Congressional action to take effect, MedPage Today reported.

The Commonwealth Fund also encourages national and regional spending targets, an action endorsed by 23 health policy experts in the New England Journal of Medicine in August.

The recommendations reinforce calls for payment reform by UnitedHealth Group's Center for Health Reform & Modernization. In its December report, UnitedHealth researchers said that if insurers dramatically change how they pay doctors and hospitals, healthcare costs could decrease by $200 billion to $600 billion during the next 10 years, FierceHealthPayer previously reported.

To learn more:
- here's the report and announcement (.pdf)
- read the MedPage Today article