Paying providers for health care

Health care provider payment systems across OECD countries are undergoing a paradigm shift. Payers for health care are moving from having a passive role when reimbursing providers to pursuing a variety of policies as part of broader efforts to improve the quality and efficiency of care.

How health providers are paid is one of the key policy levers that countries have to drive health system performance.

Paying-for-providers-project

KEY PUBLICATIONS

Value-based providers’ payment models: understanding where and under which conditions they work

Released August 2022

The report “Value-Based Providers’ Payment Models: Understanding where and under which conditions they work” explores the bundled payment model and offers country case studies examining the application of this model in a real-world context.
It highlights key enablers for the design and implementation of bundled payment models, as well as potential limitations associated with this approach to value-based financing in a health system.
The report was prepared by the G20 Global Innovation Hub for Improving Value in Health and the OECD.

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Better Ways to Pay for Health Care

Released June 2016

Payers for health care are pursuing a variety of policies as part of broader efforts to improve the quality and efficiency of care. Payment reform is but one policy tool to improve health system performance that requires supportive measures in place such as policies with well-developed stakeholder involvement, information on quality, clear criteria for tariff setting, and embedding evaluation as part of the policy process. Countries should not, however, underestimate the significant data challenges when looking at price setting processes. Data access and ways to overcome its fragmentation require well-developed infrastructures. Policy efforts highlight a trend towards aligning payer and provider incentives by using evidence-based clinical guidelines and outcomes to inform price setting. There are signs of increasing policy focus on outcomes to inform price setting. These efforts could bring about system-wide effects of using evidence along with a patient-centred focus to improve health care delivery and performance in the long-run.

OECD PROJECT ON PAYMENT SYSTEMS

There has been increasing experimentation with new ways of paying providers. In primary care, payments have become more blended as countries seek to combine different elements of payments as incentives to meet specific objectives. Countries that have used capitation and budgets have added elements to drive quality or increase productivity. In hospitals, many OECD countries have introduced DRG payments alongside other policies to constrain overall budgets and stimulate competition, with a focus on productive efficiency. Over and above these broad trends, there has been increasing experimentation with new ways of paying providers especially payment systems that span across levels of care. In this context it is worthwhile to take stock of payment systems in the OECD and highlight promising innovations that could help shed light on how governments might pay for health in the coming years.
The OECD project’s objectives are as follows:

1. Profile payment methods used in OECD countries and assess their impact on quality and costs;
2. Analyse recent innovations in payment systems;
3. Analyse challenges in implementation of new payment methods.

The OECD project is supported by a group of experts from participating OECD countries.

CURRENT PROVIDER PAYMENT IN OECD COUNTRIES

In many countries payment systems have evolved beyond fee-for-service and budgets. In primary care, additional payments linked to improvement in health outcomes or to encourage gate-keeping or care co-ordination have become increasingly popular. In hospitals, there has been a shift to finance services on the basis of activity using diagnosis-related groups (DRGs). The 2012 Health Systems Characteristics Survey analyses the payment modes currently in use in OECD countries to remunerate primary care, outpatient specialist care and inpatient care, the price regulations for health services and identifies new innovative modes of payments in more detail.

Mode of payment and financing in primary care

Figure1-Mode-of-payment-and-financing-in-primary care.PNG

Source: OECD Health Statistics 2013, Health Systems Characteristics Survey 2012, and Secretariat's estimates. Information as of April 2014.
Note: multiple answers per country possible.

PUBLICATIONS

Value-based providers’ payment models: understanding where and under which conditions they work (August 2022)
Better Ways to Pay for Health Care (June 2016)
Health Institutional Characteristics: A Survey of 29 OECD Countries, OECD Health Working Paper No. 50 (April 2010)

Paying for Performance in Health Care: Implications for Health System Performance and Accountability

The detailed analysis of these 10 case studies together with the rest of the analytical text highlight the realities of P4P programs and their potential impact on the performance of health systems in a diversity of settings. This book provides critical insights into the experience to date with P4P and how this tool may be better leveraged to improve health system performance and accountability.

Released September 2014

> Subscribers and readers at subscribing institutions can access the online edition via the OECD iLibrary

> Click on the cover for a free preview

ACCESS THE DATA

Mr. Michael Mueller: michael.mueller@oecd.org
Mr. Luca Lorenzoni: luca.lorenzoni@oecd.org
Ms. Emily Hewlett: emily.hewlett@oecd.org
health.contact@oecd.org

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