By: George C. Halvorson, Stephen M. Shortell, Laurence Kotlikoff, Elizabeth Mitchell, Richard M. Scheffler, John Toussaint, Peter A. Wadsworth, Gail R. Wilensky
The Biden-Harris health care proposal offers a public option plan for the uninsured and for those who prefer it to alternatives for which they are eligible. We strongly support the features and principles of the Biden-Harris public option plan to expand insurance coverage but believe that it should not be based on the traditional fee-for-service payment model. We know from long experience that fee-for-service payment promotes more care, but it does not promote, support, recognize, or reward better care.
The US health system needs a payment approach that promotes, supports, measures, and rewards better care that is continually improving. We need to pay providers, provider networks, and care systems an upfront amount of money to keep people well. We need to pay providers, as teams, a pre-determined risk-adjusted amount per person per month that provides hospitals and physician organizations with a predictable revenue stream and incentives to continuously improve care. We call this the Better Care Plan. It is based on the success, care improvement approaches, and high levels of customer loyalty and satisfaction of the current Medicare Advantage (MA) program. We discuss the benefits of the Better Care Plan, note evidence of its ability to deliver higher quality of care at lower cost compared to fee-for-service-based models, and highlight a few issues associated with its implementation.