By NextBestFitPhase rate changes in over several years
Move from today's rates to the new uniform rates in steps, so providers can cut costs instead of closing or leaving.
Phase rate changes over years.
Review ledgerHow this path connects
This path
Phase rate changes in over several years
Creates or worsens
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Phase rate changes over several years
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
What it fixes
- Providers leave, retire, or go cash-only if pay drops
Moving to uniform payment rates in steps gives providers time to cut costs and adjust, reducing closures.
What it creates or worsens
- Takes years, or money up front, before it pays off
Phasing payment rates in gradually delays savings.
- U.S. prices are far higher than in other countries
Gradually moving to uniform payment rates prolongs today’s high prices.
7 paths soften this
All-payer rate settingU.S. prices are far higher than in other countriesChosenCap commercial prices at a multiple of MedicareU.S. prices are far higher than in other countriesChosenRestore competition and leave prices to marketsU.S. prices are far higher than in other countriesRejectedGlobal budgets for hospitalsU.S. prices are far higher than in other countriesChosenFee-for-service at public fee scheduleU.S. prices are far higher than in other countriesChosenCapitation for primary care and integrated systemsU.S. prices are far higher than in other countriesChosenSingle public payer for everyoneTens of millions of people have no coverageChosen
Who's affected
Who gains
- People with ongoing or specialist care needs
- Providers leave, retire, or go cash-only if pay drops: Provider retirements, opt-outs, and closures reduce access in affected specialties and regions.
- Residents of areas with too few health professionals
- Providers leave, retire, or go cash-only if pay drops: Provider retirements, opt-outs, and closures reduce access in affected specialties and regions.
- Hospitals and specialist groups with high private prices
- U.S. prices are far higher than in other countries: Providers with pricing power earn more per service.
- Drug and device makers
- U.S. prices are far higher than in other countries: U.S. prices are well above those in peer countries.
Who loses
- Cash-pay and private care practices
- Providers leave, retire, or go cash-only if pay drops: Payment cuts can shift providers toward cash-only care.
- People with employer coverage
- U.S. prices are far higher than in other countries: Private plans pay the highest prices, passed on through premiums.
- Taxpayers and public budgets
- U.S. prices are far higher than in other countries: Public programs pay more than peer countries too.
Where it has been tried
- Maryland: Rate changes phased under the all-payer model.Sources: CMS Innovation Center / RTI (2023)