Healthcare in the U.S. is being challenged from all fronts, with changes in regulations, reimbursement, competition… and even the definition of the consumer.  This shifting environment has caused considerable economic concern among all of the stakeholders: providers and physicians are worried about revenues, and payers and patients are worried about the quality and affordability of care.  On top of it all, there is constant pressure to address spiraling healthcare cost increases that are ultimately unsustainable.  While there are many factors that contribute to the ever-growing cost of healthcare, there is general agreement that the root cause is a payment system that rewards the provision of service volume, rather than value.

The fee-for-service payment system is increasingly being challenged to demonstrate the economic and clinical value of services provided.  Payers are actively exploring how to change the way that physicians and hospitals are being paid.  To date, these changes have come in the form of readmission penalties, bundled payment initiatives, accountable care organizations (ACOs), and use of comparative effectiveness research (CER).

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