Payment and Delivery System Reform in Medicare: A Primer on Medical Homes, Accountable Care Organizations, and Bundled Payments

To address concerns about rising health care costs, quality of care, and inefficient spending, policymakers and health care providers have called for “delivery system reform”—changes in the way health care is provided and paid for in the United States. The Affordable Care Act established several initiatives to identify new payment models to focus on these issues.

Payment and Delivery System Reform in Medicare: A Primer on Medical Homes, Accountable Care Organizations, and Bundled Payments describes the framework and concepts of three payment models currently being tested within traditional Medicare—medical homes, affordable care organizations, and bundled payments. Taken together, these models account for care provided to about 10 million Medicare recipients.

Though preliminary results are mixed, many models are showing improved quality of care, though to date, overall net savings to Medicare are relatively modest, with large variations between models.

As more results become available, a key question is how Medicare patients fare in these delivery system reform models, especially those with the greatest health care needs. The answer, along with performance on overall spending and quality, will help policymakers identify which models to pursue and alter, as well as how to disseminate successful models.