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Reforming Payments to Healthcare Providers: The Key to Slowing Healthcare Cost Growth While Improving Quality?

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  • Mark McClellan

Abstract

This paper focuses on a broad movement toward a fundamentally different way of paying healthcare providers. The approach reaches beyond the old dichotomies about whether healthcare providers are reimbursed on a fee-for-service or a "capitated" or per-person payment. Instead, these reforms seek to create direct linkages between payments to healthcare providers and measures of the quality and efficiency of care. After an overview of payment reforms for healthcare providers and their welfare implications, this paper discusses a range of empirical studies. These often small-scale studies suggest that provider payment reforms in conjunction with greater attention to improving measurements of care quality and outcomes can have a significant impact on quality of care and, in some cases, resource use and costs of care.

Suggested Citation

  • Mark McClellan, 2011. "Reforming Payments to Healthcare Providers: The Key to Slowing Healthcare Cost Growth While Improving Quality?," Journal of Economic Perspectives, American Economic Association, vol. 25(2), pages 69-92, Spring.
    • Handle: RePEc:aea:jecper:v:25:y:2011:i:2:p:69-92
    Note: DOI: 10.1257/jep.25.2.69
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.2.69
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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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