Health Care Payment and Purchasing Strategies

Health care system reform may include changes in the methods payers use to pay for the service and goods that their members receive from health care providers and vendors. Given the effects that payment and purchasing methods can have on reform efforts, it is critical these methods are designed to implement carefully designed payment and purchasing strategies. Designing such strategies consists of multiple activities, including developing financial models for assessing alternative approaches.

Health Care Payment and Purchasing Models

Public entities’ payment and purchasing policies can have a significant impact on the health care delivery system. These policies can affect the supply and quality of services that are available to clients. Because public sector entities are often the largest — and sometimes the only — purchaser of certain services, they can have a dramatic effect on the financial health of suppliers of goods and services. At the same time, public entities must ensure that they are good stewards of the scarce resources they receive from taxpayers, to whom they are accountable.

Given these dynamics, it is critical that the public entities carry out their purchasing and payment roles in an informed and effective manner. CHLE’s services to help clients to do so include:

  • Obtaining a comprehensive understanding of the factors contributing to the client’s goal to develop new policy
  • Design and carry out structured interviews with agency staff and other stakeholders
  • Identifying, obtaining and analyzing the relevant data that would inform the decision-making
  • Developing incentive-based payment and purchasing systems
  • Constructing models for assessing the impact or proposed changes in various scenarios
  • Making recommendations for payment and purchasing systems changes that help the agency attain its goals while balancing the various factors that are affected by the changes.

Our team brings a wealth of expertise and offers a range of services for health care pricing methodologies:

  • Working closely with agencies and providers to establish payment structures
  • Providing hands-on involvement throughout the process
  • Analyzing multiple data sets
  • Researching the market and potential vendor/providers
  • Exploring alternate viable options for services

Financial Modeling

A new health care program needs a solid financial footing to get off the ground, yet that need doesn’t disappear after the program’s launch. That strong financial underpinning remains essential for ensuring its long-term stability as well as continued political and community support. With expertise in the public-private health care market, the Center for Health Law and Economics at UMass Medical School develops creative, fiscally-sound health care financing structures for public agencies reforming their health systems.

After analyzing a system’s existing funding streams and payment methodologies, our team develops models that meet specific policy goals without breaking our client’s budget or compromising health care quality and outcomes.

The Center for Health Law and Economics at UMass Medical School offers extensive financial modeling consultation that includes the following:

  • Identifying and obtaining the relevant data for modeling
  • Stating each assumption on which the modeling is based
  • Constructing a dynamic model in which alternative scenarios can be modeled
  • Presenting the results of the modeling in both summary and detailed forms to make the results of the modeling accessible to a range of audiences