Despite high healthcare expenditures, the US ranks poorly on outcomes and costs. This situation disproportionately impacts those in need because out-of-pocket expenses can cause financial hardship for socioeconomically disadvantaged individuals and limit access to affordable medical support. The current dominant payment model, fee-for-service (FFS), entails significant financial risks for each individual service and good. As a result of Alternative Payment Models (APMs), providers are held accountable for the quality of care rather than the number of services provided. APMs help shift risk to providers to ensure that they are more accountable for providing high-quality care at lower costs. To that end, developing an effective health system requires close collaboration among all stakeholders, since no ideal model exists.
Payment innovation: the next frontier in US healthcare models is a report by Economist Impact that investigates the structure, nuances and impacts of alternative healthcare payment models in the US. Considering the complexity and fragmentation of the US health system, we sought to analyze the limits of the currently dominant payment system and innovative alternatives that could shape the future of US healthcare. Our research indicates that it is vital to address the fragmentation in FFS and APMs, which results in high costs and inefficiencies. By evaluating the current payment model landscape, 1) it is critical to design inclusive models that work for diverse interests and agendas, 2) data and IT innovation must be prioritized, and 3) all payment models must tackle inequality through better risk metrics. As a lesson learned from the covid-19 pandemic, the key is for health stakeholders to work together to balance access, equity and financial sustainability. In order for the healthcare system to better meet these goals, stakeholders must work together to improve the current payment model landscape of the US.
