Payment and Costs

Challenge

How can the U.S. contain perpetually rising health care costs? How should health care providers get paid? How do alternative payment models affect provider/practice performance?

How RAND Is Meeting the Challenge

  • Exploring ways to reduce health care costs
  • Opening the "black box" of hospital prices to improve price transparency
  • Examining the impact of alternative payment models on providers

How providers are paid influences their approach to clinical practice. Rising health care costs, coupled with concerns about quality, have stimulated a shift away from fee-for-service toward value-based payment models, which are intended to improve quality and reduce costs. A complicating factor in addressing cost growth is a lack of transparency about prices. Employers in particular seldom have insight into the prices they are paying for their workers’ care.

RAND Health Care studied alternative payment approaches and their effects on costs and provider behavior. These studies analyzed the impacts at both the practice and system levels. We also recently began a series of studies on health care and prescription drug pricing. More than 12 million Americans—older and disabled adults and children—currently need assistance with eating, bathing, and managing medications. Much of the care needed by these individuals comes from family members, often at significant cost to their own health, career, and financial security.

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Payment, Cost, and Coverage Working Group

The Payment, Cost, and Coverage Working Group within RAND Health Care serves as an intellectual home for researchers across disciplines who share a common interest in topics related to health care payment, cost, and coverage.

To learn more about the Payment, Cost, and Coverage Working Group, contact Christine Eibner.