New Marketplace
Navigating Payment Reform

New Marketplace Survey: What’s Next for Payment Reform?

Insights Report · November 20, 2017

Analysis of the fifth NEJM Catalyst Insights Council Survey on the New Marketplace. Qualified executives, clinical leaders, and clinicians may join the Insights Council and share their perspectives on health care delivery transformation.

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Advisor Analysis

By Leemore Dafny and Namita Seth Mohta

As health care reform struggles to gain traction legislatively, health care professionals report that payment reforms continue to move forward at a moderate pace, and indeed are essential to achieving the Triple Aim.

Over a third (36%) of the respondents to our recent NEJM Catalyst Insights Council survey, “What’s Next for Payment Reform?,” say their organizations are heading toward value-based payments at a moderate pace. Another 27% predict a very fast or fast pace in the coming years.

The survey respondents — who are clinicians, clinical leaders, and health care executives at U.S. organizations directly involved in care delivery — also say payment reform is extremely or very important to realizing the Triple Aim goals of reducing health care costs (68% of responses), improving quality outcomes (65%), and improving access to care (64%).

Shift Toward Value-Based Payments in the Industry and at Organizations Is Accelerating

From the New Marketplace Insights Report: What’s Next for Payment Reform? Click To Enlarge.

Insights Council members are far more bullish about value-based payment than they perceive the Trump administration to be, with 44% calling the administration unsupportive or very unsupportive. This is a devolution from earlier this year, when only 29% of respondents to another Insights Council survey fielded in February said they expected the trend toward value-based payments to decrease under the Trump administration, while 34% predicted support to increase.

When asked which specific initiatives hold the most promise for cost control, respondents rank price transparency highest (chosen by 57% of respondents). “Improve transparency of pricing, charges, insurance payment, patient payment,” writes one respondent. Another calls for “Price transparency — very important for my patients and completely opaque to me.”

Unfortunately, the wish for price transparency doesn’t correspond with published studies on the subject. For instance, a 2016 investigation of the association between availability of a price transparency tool and outpatient spending found that offering a price transparency tool was not associated with lower health care spending and that only a small percentage of eligible employees at the two large companies studied used the tool.

Few Respondents Feel the Trump Administration Supports Value-Based Payment

From the NEJM Catalyst New Marketplace Insights Report: What’s Next for Payment Reform? Click To Enlarge.

High-deductible health plans (HDHPs), the choice of a third of Insights Council respondents to reduce health care spending growth, also have yielded mixed results in studies. Researchers studying a large employer’s adoption of an HDHP found that total spending dropped sharply, by 13% annually, but the decline was due to avoidance of care across all types of services — including preventive care — rather than comparison shopping. The study questioned “whether a high deductible may be too blunt an instrument with which to rein in health care costs.”

Support for Single-Payer

What surprises us most — though maybe it shouldn’t, considering that other payment reform avenues are being stymied — is that nearly half of respondents (49%) say the best outcome for future payment reform is single-payer health care. In verbatim responses, an overwhelming majority mention single payer as the one thing they’d like to change about health care payments.

“The current system is a mess because payment in the private sector is related to competition, contracts, etc. One gets paid a different amount by each. A single payer would have lower per episode payment, but would cover all and make billing simpler and more reliable,” one clinical leader writes. Another repondent, a physician, comments, “We need to get all the layers out of the payment process.”

Although momentum for single-payer health care is building, whether and when it might culminate in action is far from clear. For now, respondents are focused on implementing and building on payment reforms rolled out during the Obama administration. The hunt for a silver bullet to stem cost growth and encourage value-based consumption — or rather, a collection of bullets continues.


If you could change one thing about health care payment, what would it be?

“Current incentives still tip to fee for service and high cost. We need to pay for health, not pay for disease treatment.”
— Service line chief at a large teaching hospital in the South

“Single payer, funded by taxes.”
— Clinical leader at a small nonprofit hospital in the Pacific West

“I think the ‘American over-treatment machine’ is far more pervasive than generally appreciated, and is intimately linked to the ‘over-billing machine.’ Until this is meaningfully addressed, we will make no real progress.”
— Clinician at a small nonprofit hospital in the Northeast

“I would provide more emphasis on outpatient primary and preventive care access to reduce the burden on EDs and prevent hospital admissions for illnesses that could be prevented.”
— Executive at a small nonprofit health system in the Midwest

Download the full report for additional verbatim comments from Insights Council members.

Charts and Commentary

by NEJM Catalyst

We surveyed members of the NEJM Catalyst Insights Council, comprising health care executives, clinical leaders, and clinicians, about what’s next for payment reform in the United States. The survey covers the Trump administration’s support of value-based payments, the pace of the health care industry and organizations’ shift toward value-based payments, the importance of payment reform to realize key goals, initiatives likely to improve the quality of care and reduce health care spending growth, the fate of existing payment reform initiatives under the Trump administration, the effectiveness of the Medicare Quality Payment Program, and the best outcome for future payment reform. In total, 712 completed surveys are included in the analysis.

Download the full report to see the complete set of charts and commentary, including data segmentation, the respondent profile, and survey methodology.

Download Full Report

NEJM Catalyst wishes to thank Michael McWilliams, MD, PhD, Professor of Health Care Policy and Associate Professor of Medicine at Harvard Medical School, and general internist at Brigham and Women’s Hospital, for assistance in constructing this survey. Check NEJM Catalyst for monthly Insights Reports not only on the New Marketplace, but also on Patient Engagement, Leadership, and Care Redesign.

Join the NEJM Catalyst Insights Council and contribute to the conversation about health care delivery transformation. Qualified members participate in brief monthly surveys.

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