Health Care Fragmentation

The way in which health care providers are paid is an important cause of delivery-side fragmentation. The current encounter-based, primarily feefor- service payment system has a distinct tendency to reward unbundling and inefficiency. Even under the best of circumstances, the current payment system does not create systematic incentives to deliver efficient high quality care. This chapter argues that reform of the payment system should be high on the list of priorities if we want to address health care fragmentation. Yet, attempts to reform the payment system will create numerous opportunities for those who profit from the status quo to engage in symbolic blackmail. Furthermore, it remains to be seen how much fragmentation consumers actually want; the preferences of reformers may well differ from that of consumers. Aspiring reformers should be aware of these risks and frame their efforts accordingly.