March 1, 2011

The historical fee-for-service payment model in healthcare does not provide incentives to support progress toward the reform goals of better care at lower cost. An unintended consequence of the model is that it doesn’t reward physicians and hospitals for improving quality or lowering costs. In fact, it often encourages the maximum use of resources and fails to reinforce prevention and wellness. A new payment model which incents better health outcomes at lower cost must be developed — but ideas differ on how to achieve this goal.

The Center for Healthcare Transformation (CHT) convened a series of work sessions to discuss alternative payment models and develop non-partisan recommendations to meet this challenge. These sessions included various stakeholders across the healthcare industry, and were led by Rita E. Numerof, Ph.D., President of Numerof & Associates, Inc., Julia Eckstein, Vice President of State Government Affairs for CHT, Former Speaker of the House Newt Gingrich, and former Senate Majority Leader Tom Daschle. On February 8, CHT released a white paper, Transforming Healthcare: Recommendations for Payment Reform, authored by Dr. Numerof, describing in detail the six key recommendations for payment reform that were developed in these sessions.