Paying for Care Episodes and Care Coordination

The fee-for-service system of provider payment is increasingly viewed as an obstacle to achieving effective, coordinated, and efficient care.1 It rewards the overuse of services, duplication of services, use of costly specialized services, and involvement of multiple physicians in the treatment of individual patients. It does not reward the prevention of hospitalization or rehospitalization, effective control of chronic conditions, or care coordination.Pay for performance is one strategy for moving from payment based solely on the quantity of services rendered to payment based on the quality or efficiency of care.2 Such payment systems are now widely used in private health . . .