National Academy of Medicine

Paying for Population Health: A View of the Opportunity and Challenges in Health Care Reform

By James A. Hester
September 03, 2013 | Commentary

The U.S. health care system is in the early stages of transitioning from a payment system driven by volume to one based on value. New payment models are being tested at scale by both private and public payers, and payers are learning to align their financial models with each other in order to accelerate the transformation of the system. The acceptance of the Institute for Health Care Improvement’s “Triple Aim” as the framework for defining value in the new system has led to broad diffusion of language supporting the three goals of 1) improved health of populations, 2) improved patient experience for those who need care, and 3) reduced trends in total per capita health care expenditures. This creates the possibility of a new funding stream that rewards improvements in population health and a window of opportunity to transition to a more sustainable funding model for population health. However, the complexity and relative weakness of the key building blocks of population health payment models create the threat that population health will not be integrated into the new payment system in a meaningful way.

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Disclaimer: The views expressed in this paper are those of the authors and not necessarily of the authors’ organizations, the National Academy of Medicine (NAM), or the National Academies of Sciences, Engineering, and Medicine (the National Academies). The paper is intended to help inform and stimulate discussion. It is not a report of the NAM or the National Academies. Copyright by the National Academy of Sciences. All rights reserved.