Large Employers That Have Lived Through Transformation Say Payment Reform Alone Won't Cut Costs And Reengineer Care.

As payment reform in health care gathers momentum, employers, as major payers, endorse the effort to move away from volume-driven payment to incentivizing and rewarding the delivery of better health care at lower cost. In this commentary we discuss large employers' perspectives on three particular challenges that payment reform alone, as important as it is, may not be sufficient to address: high health care prices, inefficient and complex systems, and an outdated work environment ill designed to meet the pressing goals of better health care at lower cost. We believe that policies that support health care organizations in redesigning work processes will be essential to reducing prices and simplifying interactions in care delivery. We also believe that health care organizations will need to redesign their compensation systems to align their employees' pay with improvements in performance. To that end, we describe the major transformation that IBM underwent in the 1990s to position itself to compete in a radically changed computer marketplace. We also offer several policy recommendations to support health care organizations in making the necessary changes. [ABSTRACT FROM AUTHOR]