The
United States stands at a crossroads in how to pay for health care. Fee for
service, the dominant payment model in the U.S. and many other countries, is
now widely recognized as perhaps the single biggest obstacle to improving
health care delivery. A battle is currently raging, outside of the public eye,
between the advocates of two radically different payment approaches: capitation
and bundled payments. The stakes are high, and the outcome will define the
shape of the health care system for many years to come, for better or for
worse. In this article, the authors argue that although capitation may deliver
modest savings in the short run, it brings significant risks and will fail to
fundamentally change the trajectory of a broken system. The bundled payment
model, in contrast, triggers competition between providers to create value
where it matters—at the individual patient level—and puts health care on the
right path. The authors provide robust proof-of-concept examples of bundled
payment initiatives in the U.S. and abroad, address the challenges of
transitioning to bundled payments, and respond to critics’ concerns about
obstacles to implementation. [ABSTRACT FROM AUTHOR]