CHQPR June 5, 2022
The failure of current value-based payment programs to significantly reduce healthcare spending has resulted in proposals to (1) require providers to take “downside risk” for all of the services their patients receive, and (2) completely replace fee-for-service payments with “population-based payments.”
There is no evidence that requiring providers to take financial risk for the total cost of care or replacing fees with capitation will be more successful than shared savings models in controlling spending while maintaining quality. In fact, there is good reason to believe these types of programs would cause more problems than they solve because of five fundamental flaws in the ways such programs operate:
1. The budgets and spending targets that are used will always be wrong;
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