Modern Healthcare July 11, 2015
Most industry leaders believe that, in the near future, fee-for-service payment will be replaced by “population-based payment,” intended to reduce incentives to over-treat patients and to encourage prevention. However laudable these goals, we believe the expected shift to population-based payment is unlikely to materialize.
We take population-based payment to mean time-limited fixed per-capita payment for a defined population of covered lives. Much of the inevitability of the trend toward population health is attributed to the Medicare ACO/Shared Savings programs created by the Affordable Care Act. The accountable care organization has been touted as the eventual successor to DRG and Part B payments in regular Medicare. Medicare’s ACO programs now cover about 8 million of its beneficiaries (compared to 17 million...
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