Robert Wood Johnson Foundation: Making the Business Case for Payment and Delivery Reform

This issue brief published by the Robert Wood Johnson Foundation was authored by Harold Miller from the Center for Healthcare Quality and Payment Reform, as part of the Network for Regional Healthcare Improvement.  The brief details a 10-step process for health care purchasers and providers to develop a sound business case to support successful reforms to both health care payment and delivery systems.

  1. Define the planned change in care and the results it is expected to achieve.
  2. Estimate how the type and volume of services will change.
  3. Determine how payments/revenues will change under the current payment system.
  4. Determine how the costs of services will change.
  5. Calculate the changes in operating margins for providers.
  6. Identify the changes in payment needed by providers to maintain positive operating margins.
  7. Determine whether a business case exists for both purchasers and providers.
  8. Refine the changes in care to improve the business case.
  9. Analyze the impact of potential deviations from planned care and expected outcomes.
  10. Design a payment model that pays adequately for desired services, assures desired outcomes, and controls variation and risk.

The issue brief also describes four major types of data needed to successfully carry out the business case:

  • Health care billing/claims data;
  • Clinical data from electronic health records or patient registries;
  • Data on the costs of health care services; and
  • Data on patient-reported outcomes.

Link to Original Source

An accompanying video is available on the Academy Health website.

This entry was posted in Health Care Reform, Health Care Reform: Payment Reform, Health Care Reform: Quality Improvement. Bookmark the permalink.

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