10 Steps to Build a Business Case for Payment Reform

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Healthcare's traditional fee-for-service payment system can create "large and often insurmountable barriers" to changes in patient care, such as avoiding unnecessary tests or providing treatment at earlier and lower-cost stages of disease.

A brief from the Robert Wood Johnson Foundation outlines 10 steps to help healthcare providers build a business case for improvements in their delivery and payment systems.

1. Define the planned change in care and the expected results.

2. Estimate how the type and volume of services will change.

3. Determine how payments/revenues will change under the current 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.

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