Morning Briefing

Stateline: Health Care Experiment Aims For Healthier Patients, Lower Costs

Traditionally, doctors and hospitals are paid for each procedure, treatment or test they provide. But critics say this “fee for service” system drives up costs and harms patients by pushing providers to do as much as possible, regardless of whether it benefits patients. Under Vermont’s plan, to be phased in through 2022, health plans would pay doctors and hospitals based on how well they care for their patients and contain costs, rather than on the volume of services they provide. ... Other states will be watching closely. Studies of smaller pay-for-performance experiments have yielded mixed results in patients’ health outcomes. And in an urban area with competing insurers and hospitals, it would be more difficult to coordinate a pay-for-performance system than it is in Vermont. Nevertheless, if Vermont’s plan is successful it is likely that others will duplicate it. (Ollove, 3/2)