The U.S. healthcare industry is currently undergoing what will ultimately be a radical transformation, driven by unsustainable cost increases, increased regulation, and shifting power relationships among payers, providers, physicians, and patients.  We have reached the point where all four of these key constituent groups have significant economic concerns — providers and physicians about their revenues, and payers and patients about the affordability of care.

As the healthcare reform debate continues, there are some things everyone agrees on: the dual goals of better care outcomes at lower costs are appropriate and achievable.  Nor is there much disagreement that the way we pay for healthcare currently isn’t an incentive for progress toward these goals.  The current system of payment does not reward physicians and hospitals for improving quality or lowering costs, but instead unintentionally encourages the inefficient use of resources and even waste.  Across both the public and private sectors there is suddenly widespread recognition that this is an unsustainable business model.  Something has got to change.

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