The Era of Delivery System Reform Begins

Abstract

Health care reform evolves in distinct phases. Insurance reform, the critical first step, gained a foothold through the 2010 Affordable Care Act. The nation now enters the midst of payment reform, a second chapter motivated by the need to slow health care spending. Payers across the country are increasingly putting health care on a budget, moving from fee-for-service to lump-sum payments for bundles of services or populations of patients. Hospitals, health care centers, and physicians in turn are consolidating into accountable care organizations (ACOs) to address these new payment contracts, which reward lower spending and higher quality. In July, 89 new ACOs were launched in Medicare. Combined with 59 Medicare ACOs started in January, these organizations bring more than 130 000 physicians and 2.2 million beneficiaries into an emerging model of organization-based health care.¹ Global budget contracts from private insurers are doing the same for millions more working-age adults, their families, and their physicians.²