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Promoting Reform Through Payment Restructuring

As part of our Delivery System Reform Issue Workgroup, ITUP recently produced this white paper that discusses, among others, opportunities 
under 
health 
reform
 for 
California to 
achieve cost
 savings and improvement in care by imposing various, novel reforms and payment techniques in Medi-Cal, Medicare, Health Families and private insurance.

Alternative payment schemes could include:

  • Capitation Variations,
  • Bundled Payments,
  • Pay-for-Performance,
  • Mixed Payment Mechanisms,
  • Value-Based Insurance Design,
  • Reference Pricing, and
  • the PROMETHEUS System

In an interview with Suzanne Delbanco of Catalyst for Payment Reform, she recommends we change payment structures by:
(1) linking payments to health care provider performance,
(2) removing incentives for delivering excess medical services, and
(3) setting reference prices for particular types of services.

Delbanco hopes we can “jump start a movement toward changing the way we pay for health care in the United States, so that a greater proportion of payment is either tied to performance somehow or is actually designed to cut waste out of the system.”

With so much change occurring so quickly, this could be the moment that payers experiment with novel reimbursement mechanisms and become true catalysts for change and cost savings in our health care delivery system.

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