The Basics: Alternative Delivery & Payment Models

Care Delivery Models

The healthcare system is reorienting toward value. Payers and providers are working together to deliver services in ways that engage patients and their families, support patient outcomes, improve the quality of care, and reduce total cost. No one delivery system works for all communities, and the models are not mutually exclusive. In this chapter we provide the basics on five common delivery systems being deployed in communities across the country:

Which models communities deploy depend on available resources, community health needs, and health goals.

Payment Models

Payers are increasingly moving away from traditional fee-for-service (FFS) payments to reimbursement models that base some or all of a provider’s payment on performance. In January 2015, the Department of Health and Human Services (HHS) set goals for more aggressively shifting the Medicare program from a volume-based to a value-based payer. It seeks to align 85% of Medicare fee-for-service (FFS) payments to performance by the end of 2016, reaching 90% by 2018. It also intends to transition at least 30% of all FFS payments to alternative payment models, such as shared savings and bundles, by the end of 2016, reaching 50% by the end of 2018 (DHHS 2015). HHS has asked state Medicaid programs, commercial insurers, and other payers to align their targets for value-based payment with the Medicare Program.

Click here to review five common “alternative” payment models:

  • (1) Pay-for-Performance (P4P)
  • (2) Care Coordination
  • (3) Shared Savings
  • (4) Bundled Payments (ACOs)
  • (5) Full and Partial Capitation.