Payment and Pricing Decisions in Health Care Reform

Issue Brief

Payment and Pricing Decisions in Health Care Reform

Rate setting, cost control, and public option proposals

Any effort to reform health insurance in the United States must tackle the prices we pay for health care. There are many complex challenges to addressing prices. Some proposals build on the existing Medicare fee schedule, while others suggest promoting alternative payment mechanisms—or even starting from scratch. The stakes are substantial, as many reform proposals rely on reining in prices to achieve the savings necessary to expand health insurance to the uninsured. At Penn’s LDI Medicare for All and Beyond conference, a panel of researchers, hospital administrators, and policy experts considered issues related to health care payment and pricing that any health care reform proposal must address, including the implications of rate setting for providers and patients. At what level should these rates be set to assure access and quality of care, while incentivizing innovation and rewarding excellence?