This paper is designed to assist health care payers and policymakers to restructure payment systems in ways that will improve the quality of health care and reduce (or slow the growth in) the costs of health care. Drawing on the research and proposals of many researchers and practitioners, it attempts to: summarize the key concepts involved in any discussion of ways to restructure payment systems; catalog the quality and cost problems that current payment systems create; list the key concerns that have been raised about pay-for-performance systems in health care; propose 12 goals that revised payment systems should seek to achieve in order to effectively address the problems; define the specific issues that need to be resolved in order to achieve these goals; describe the primary options for addressing each of these issues; and suggest a general strategy for making progress on payment restructuring.
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