Health care modernization requires a move away from rewarding increased volume of high-cost medical procedures toward rewards for prevention and efficient management of patient care, especially patients with high-cost chronic conditions. Medicare has the leverage to lead this modernization because its payment innovations have been and likely will be adopted by the rest of the marketplace. Medicare could create opportunities for cost savings and quality improvements by allowing providers to focus on quality care that achieves savings while improving quality to earn a share of those savings. Experts see particular promise in payment innovations that reward primary care and chronic care management practices that “bundle” services typically paid for separately into a single payment, and encourage collaboration and coordination among health care providers who currently practice, as most do, in small groups.
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