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Best of 2014: Making the Case for Payment Reform

The cost of health care affects lives in many ways that go beyond determining how much you pay your doctor. Consequences of rising health care costs include cross-sector impacts on wages, employment, the price of goods and services, and the ability to fund other public services like education and affordable housing. New York's health care spending is among the highest in the nation and is projected to increase further, outpacing both inflation and overall economic growth.

The fee-for-service system drives up these costs because it encourages for the delivery of more care, tests, and treatments, rather than incentivizing more effective care. Moreover, fee-for-service perversely penalizes many excellent providers who keep people healthy and avoid unnecessary and expensive care. Alternative payment methods, moving away from fee-for-service reimbursement, can drive meaningful change in health care costs and also improve health outcomes.

Restructuring the delivery of health care and associated spending in New York will require understanding the drivers of health care costs and the state of existing payment methods. In early 2014, NYSHealth released a new chart book prepared by Health Management Associates. "Health Care Costs and Spending in New York State" pulls together information on health care costs, spending, and payments based on existing State and national research. The charts synthesize a wide range of data and create a resource that explains the impact of rising costs, drivers of spending growth, variations in spending, and the relationship between quality of care and spending. The chart book is intended to facilitate ongoing research on health care costs and generate continued conversation on payment reform in New York. The chart book has been used by a variety of stakeholders, including State officials in the development of the State Health Innovation Plan.

Download the Report




Across the country, providers and payers are experimenting with new payment arrangements to improve health outcomes and reduce costs. To provide insight on the current payment landscape in New York State, NYSHealth awarded Catalyst for Payment Reform (CPR) a grant in 2014 to support the first-ever New York State scorecard on payment reform. The scorecard will allow New York State to set goals and measure progress toward payment reform. CPR will identify health care expenditures in New York State that are paid using fee-for-service and alternative payment methods (e.g., bundled payments, shared savings, and global payments) to identify potential savings. The scorecard will also feature differences between fee-for-service spending in the Medicaid and commercial markets, going beyond scorecards previously produced to rate payment reform performance in other states. The scorecard will be publicly available online in spring 2015.

NYSHealth's Best of 2014

 
Healthy
Neighborhoods

 
Diabetes
Prevention

 
Prevention
Agenda

 
Health Care
Coverage

 
Payment
Reform

 
 
Primary
Care Access

 
Health Homes
 
Mental Health for
Justice-involved
People
Supporting
Veterans

 
Convening
Stakeholders

 

Download a PDF of the full Best of 2014.

 

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