Expanding Health Care Coverage

Project Title

From Potentially Avoidable Complications to Potentially Achievable Savings: A Payment Reform Initiative for New York State

Grant Amount


Priority Area

Expanding Health Care Coverage

Date Awarded

July 1, 2009


Outside New York State






The rising cost of health care has imposed economic burdens on families, employers, and governments at every level.

While there is no simple formula for lowering the growth in health care costs, stakeholders and policymakers are making efforts to reduce the cost of care without compromising quality. In 2009, NYHealth awarded Bridges to Excellence—a program of the Health Care Incentives Improvement Institute—a grant to launch two payment reform pilot programs that offered incentives for physicians and hospitals to collaborate, improve the quality of care, and reduce costs.

There are significant opportunities to reduce annual health care spending without compromising quality of care. Research has documented that the volume and intensity of care varies widely in different regions, and that higher cost of care is not associated with higher quality. This new payment model is a promising approach to wring potentially avoidable costs out of the system. It works by creating an incentive for doctors to offer high-quality care by reimbursing providers for an entire episode of care for a patient rather than individual procedures. This global rate is calculated using evidence-based guidelines for what constitutes quality care for a given condition, and providers are rewarded when patients have fewer avoidable complications. Through partnerships with both commercial and public insurers, Bridges to Excellence launched two pilot tests for reimbursement using evidence-based case rates for six key chronic conditions in New York State, and analyzed the potential savings this strategy will generate. An evaluation of this pilot phase provided State policymakers with information on where wasteful spending can be eliminated from the health care system and whether this payment strategy will motivate providers to offer high-quality care at a lower cost.

Click here to read the July 6, 2009 article in Time Magazine, “Cutting Health-Care Costs by Putting Doctors on a Budget.”

Click here to read the June 25, 2009 article in the New York Times, “Can Health Care Come With a Warranty?”