Rand Health Study: Investment in New Healthcare Quality Measures Needed as Cost-Cutting Strategies Grow

side note: With all the cost-cutting that is proposed at both federal and state levels, this is an especially prescient report.

As the healthcare industry, employers and government officials seek to control the growth of health spending, new efforts are needed to develop and refine quality-of-care and other performance measures that can assure changes will improve medical care and do not harm patients, according to a new study by RAND Health, the nation’s largest independent health policy research program.

While some current quality measurement tools may be useful to new performance-based payment models, significant work is needed to design and test methods which can be applied to measuring the quality of care provided under innovative payment reforms, according to the report.

“Insurers and purchasers of healthcare in the United States are on the verge of potentially revolutionary changes in the approaches used to pay for healthcare,” said Eric Schneider, MD, the study’s lead author and a senior natural scientist at RAND. “A significant investment is needed to develop new performance measures that can assure high quality care as the United States experiments with these new payment models.”

The RAND report studied 90 payment reform programs and identified 11 general payment reform models that reward providers for delivering better-quality, cost-conscious care or pay healthcare providers a fixed amount to coordinate treatment of an illness such as diabetes.

Since at least the 1980s, the traditional fee-for-service model of healthcare payment has been challenged by reforms that alter payment methods in order to limit costs. Critics say that the persistent use of fee-for-service—where health providers are rewarded only when they provide more care—encourages unnecessary health care spending without enhancing quality or efficiency.

The Patient Protection and Affordable Care Act of 2010 has given new impetus to payment reforms that can achieve both cost containment and improvements in healthcare quality. Most of the new approaches are expected to tame costs by reversing incentives to deliver more care. Instead they create incentives to providers and patients to weigh the costs of their medical choices. But some worry that if providers are at financial risk, these payment models may have mixed consequences for quality. Quality measurement should be used to assure that the financial incentives produce high quality cost-conscious care.

The study, “Payment Reform: Analysis of Models & Performance Measurement Implications,” is available at www.rand.org.

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