Health Affairs Article Says True Reform Comes Through System Transformation, Not Just Payment Reform

In this month's Health Affairs, Martin Sepulveda and Helen Darling analyze historical attempts at delivery system transformation through the lens of large employers as payers and argue that payment reform alone will not cut costs and re-engineer care. They discuss large employers’ perspectives on three particular challenges that payment reform alone, as important as it is, may not be sufficient to address: high health care prices, inefficient and complex systems, and an outdated work environment ill designed to meet the pressing goals of better health care at lower cost. They argue that policies that support health care organizations in redesigning work processes will be essential to reducing prices and simplifying interactions in care delivery. They also state that health care organizations will need to redesign their compensation systems to align their employees’ pay with improvements in performance. As an example, they describe the major transformation that IBM underwent in the 1990s to position itself to compete in a radically changed computer marketplace. The article also offers several policy recommendations to support health care organizations in making the necessary changes.