Pay for Innovation or Pay for Standardization

How to Best Support the Patient-Centered Medical Home

This primer published by the Network for Regional Healthcare Improvement (NRHI) urges major reforms in the way Medicare, Medicaid and private health insurance plans pay primary care physicians. Pay for Innovation or Pay for Standardization cautions that higher payments to primary care practices should be based primarily on whether they improve outcomes for their patients, rather than whether they meet detailed accreditation standards.

The recommendations in the report were developed by more than 100 health care leaders from across the country who participated in NRHI’s 2008 national Summit on Healthcare Payment Reform. Summit participants developed recommendations regarding the type of payment changes needed and which primary care providers should be able to participate. The recommendation highlight that we should encourage and assist small physician practices to participate in medical home initiatives, since that is where the majority of primary care physicians in the nation practice.

This is the third in a series of reports from NRHI examining ways to reform payment systems in order to improve quality and reduce costs in the health care system, supported by the Robert Wood Johnson Foundation.