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Efforts to transform the current US health-care system fee-for-service payment model got a boost as HHS Secretary Sylvia Burwell announced plans to transform the way Medicare providers are paid. "For the first time, we’re going to set clear goals and establish a clear timeline for moving from volume to value in the Medicare system,” Burwell said. By 2018, Burwell wants 50% of Medicare payments to be based on quality—not quantity. Last fall, the National Scorecard on Payment Reform (representing 65% of commercially-insured lives in the U.S.) reported a dramatic shift in how health plans pay physicians and hospitals, with 40 percent of their payments now designed to encourage health care providers to deliver higher-quality and, in some cases, more affordable care. However, the current value payments are mostly reward-based, with no financial risk to the provider; only a very small percentage are shared-risk or bundled payment arrangements. Hospitals have been the most impacted by these arrangements. Adding Medicare to the mix will definitely help pick up the pace of this ongoing transformation.

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