One popular idea for lowering the nation’s ballooning health care spending is to change the way insurers payprovider organizations for their care. Instead of paying a fee for each service rendered—a model that can encourage the unscrupulous use of more services even when the benefit is dubious—reformers suggest giving clinical practices a global yearly budget to care for a population of patients. The rationale is that operating with a capped budget would incentivize greater use of preventive care and discourage wasteful services.

Evidence from preliminary, and mostly short-term, studies of these so-called “global payment” experiments has been mixed and has offered a limited snapshot on outcomes. The question remained: Could it work over the longer term once the early changes or investments in care delivery had been made?

The likely answer may be yes, according to research published July 18, 2019 in The New England Journal of Medicine, which reveals that one of the largest, oldest private insurance plans to use population-based global budgets achieved sustained success in slowing spending growth while improving the quality of patient care.

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