The Obama administration outlined ambitious new goals Monday to transform over the next four years the way that the gargantuan Medicare program pays doctors and hospitals, rewarding providers that achieve better outcomes for patients rather than those that just do more.
The move away from so-called fee-for-service medicine is a central, if little recognized, goal of the Affordable Care Act, which the president signed five years ago.
Most experts believe that this shift is crucial to improving the quality of care that patients receive, while also restraining costs at a time when millions of baby boomers will be entering the nation's primary insurance program for the elderly.
Under the goals announced Monday, Medicare will make 30 percent of its direct payments to doctors, hospitals and other providers through alternative payment models by next year, up from nearly nothing four years ago.
These models include bonuses for doctors to coordinate patients' care and programs that set a budget for patient care and reward physician practices, hospitals and others who deliver the care under budget while achieving good outcomes for patients.
By 2018, half of Medicare's direct payments to providers should be through such models, according to the federal Department of Health and Human Services.