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Better Ways to Pay for Health Care

image of Better Ways to Pay for Health Care

Payers for health care are pursuing a variety of policies as part of broader efforts to improve the quality and efficiency of care.  Payment reform is but one policy tool to improve health system performance that requires supportive measures in place such as policies with well-developed stakeholder involvement, information on quality, clear criteria for tariff setting, and embedding evaluation as part of the policy process. Countries should not, however, underestimate the significant data challenges when looking at price setting processes. Data access and ways to overcome its fragmentation require well-developed infrastructures. Policy efforts highlight a trend towards aligning payer and provider incentives by using evidence-based clinical guidelines and outcomes to inform price setting. There are signs of increasing policy focus on outcomes to inform price setting. These efforts could bring about system-wide effects of using evidence along with a patient-centred focus to improve health care delivery and performance in the long-run.

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Reforming traditional health care provider payments

This chapter presents an overview of the predominant payment systems used in OECD countries to pay health care providers, notably in primary care, outpatient specialist care and hospital settings. These payment methods include fee-for-service (FFS), capitation, global budgets and salary and more recently, payment per case/diagnosis related groups in the hospital setting. Each payment method generates incentives, likely to affect provider behaviour and the predominant payment systems do not always provide the right incentives and tend to encourage volume of services and increases in health spending. These “traditional” ways of paying providers are often not well adapted to contemporary health system challenges, for instance the need to increase co-ordination of care, or provide high quality care for chronic diseases. While some OECD countries have begun to reform their traditional payments, others have introduced payment innovations that are more closely tied to key health system objectives of efficiency and quality of care.

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