Building a New Payment System

Business Wire, June 23, 2008

HFMA Releases Healthcare Payment Reform; From Principles to Action

WESTCHESTER, Ill. -- As attention to healthcare reform intensifies in the presidential campaign, it is important to remember that real and sustainable reform can only be achieved if the fundamental financial incentives within the delivery system are changed. The Healthcare Financial Management Association (HFMA) has released the first in a series of reports that will collectively address building a new payment system. Healthcare Payment Reform; From Principles to Action debuted today at HFMA's ANI: The Healthcare Finance Conference in Las Vegas, NV. The report was the result of significant input from representatives of a variety of key stakeholders - consumers, providers, payers, and employers - who took time to contribute to this critical topic.

About the Current Payment System

The current healthcare payment system blocks true reform by inadequately rewarding wellness, high-quality care, and efficiency, and by driving up costs through the system's complexity. Effective payment system reform must take place within a set of principles that support the nation's health goals, as well as the needs of all key stakeholder groups. The Healthcare Financial Management Association (HFMA) has worked with healthcare thought leaders around the country to identify those principles, as well as actions needed to make those principles a reality.

"A multitude of tradeoffs are necessary to accommodate the unique concerns of providers, payers, employers, and consumers for payment reform," says Richard L. Clarke, DHA, FHFMA, president and CEO, HFMA. "However, HFMA has identified widespread stakeholder support for a set of principles and certain types of system design for meaningful payment reform. This consensus presents an important opportunity to take action on this complex and critical reform."

Principles of a New Payment System

Healthcare Payment Reform: From Principles to Action focuses on four major areas:

* Generally accepted health goals for the U.S.

* Barriers to achieving those goals that are caused by the current payment system

* Principles that provide a framework to reduce those barriers,

* Guidance for reform efforts

The principles identified in the report are:

* Quality - Payments should encourage and reward high-quality care and discourage medical errors and ineffective care.

* Alignment - Payments should align incentives among all stakeholders to maximize the efficiency and coordination of health services.

* Fairness - Payment systems should sufficiently balance the needs and concerns of all stakeholders.

* Simplification - Payment processes should be simplified, standard, and transparent.

* Societal benefit - The resources needed to support broad societal benefits such as medical and public education, medical research, and care for disenfranchised or uninsured persons should be identified and paid for explicitly.

Elements of a New Payment System

The report also presents a number of payment types and elements that can support these principles, along with areas of stakeholder consensus and concern about each.

To read the report in its entirety, visit the HFMA booth in the Idea Exchange Exhibit at ANI, or view it online at www.hfma.org/paymentreform. To obtain highlights of the report - elements, principles, actions - call the HFMA press contacts listed below.

About HFMA

The Healthcare Financial Management Association (HFMA) provides the resources healthcare organizations need to achieve sound fiscal health in order to provide excellent patient care. With over 35,000 members, HFMA is the nation's leading membership organization of healthcare finance executives and leaders. We provide education, analysis, and guidance; we lead change and innovative thinking; and we create practical tools and solutions that help our members get results. Addressing capital access to improved patient care to technology advancement, HFMA is an indispensable resource on healthcare finance issues.

For more information, visit www.hfma.org.