H&HN April 1, 2016
An outline of the different ways the federal government is transferring risk to providers
The least understood and arguably most disruptive change brought about by the Affordable Care Act is the transfer of financial risk to providers. It is one of the law’s two key mechanisms, along with expanded insurance coverage, intended to reduce health costs over the decade.
The industry has coined the phrase “provider-sponsored risk,” or PSR, to describe the basic change in incentives from volume to value. It essentially means that providers — doctors, hospitals, allied health professionals and others — no longer will be paid on a fee-for-service basis but, instead, will be compensated for the value of the work they do. The theory behind this...
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