Paying for Performance: the Business Case

With health care premiums skyrocketing 59% since 2000, purchasers have a right to ask whether the quality of care is improving correspondingly. Studies have estimated that as much as 30 percent of all medical expenditures are wasted on poor quality care. Medical errors, hospital-acquired infections, and readmissions for complications are not only adversely affecting patients’ health, but are resulting in higher costs to the health care system. Plus, there are regional variations in treatment in the nation that also impact outcomes. One way to promote health care quality is by “Paying for Performance,” an innovative concept which links performance to payment and rewards health care providers that meet quality standards.