Spiraling U.S healthcare costs have garnered considerable national attention. Cost inflation, coupled with lagging quality outcomes and a lack of transparency has fueled legislative reform efforts that have roiled the entire sector.

The industry has reached a point where all four of the key constituent groups (payers, providers, physicians, and patients) have significant economic concerns — providers and physicians about their revenues, and payers and patients about the affordability of care. The current fee-for-service model, with its incentives toward volume of care rather than quality, must change. Delivery organizations are increasingly challenged to confront these issues by adopting a model which provides incentives to control costs, aligning the goals of providers more closely with those of payers. As a result, concepts like “bundled pricing” are gaining momentum.