Hastings Center News

Hastings Center Scholar on How Some Countries Control Health Spending

Although the U.S. has the highest health care prices in the world, the specific mechanisms commonly used by other countries to set and update prices are often overlooked, with a tendency to favor strategies such as reducing the use of fee-for-service reimbursement. Many U.S. health policymakers recognize that fee-for-service models incentivize physicians and health systems to perform more tasks than may be needed. Comparing policies in three high-income countries (France, Germany, and Japan), Hastings Center research scholar Michael Gusmano explains how physician payments are set in France, Germany, and Japan in A Health Podyssey, the Health Affairs podcast

The podcast follows a new research article, Getting The Price Right: How Some Countries Control Spending In A Fee-For-Service System, in Health Affairs by Gusmano, Miriam Laugesen, Victor G. Rodwin, and Lawrence D. Brown.

The analysis finds that all three countries attempt to balance the interests of payers with those of physician associations. Instead of looking for policy importation, the analysis demonstrates the benefits of structuring negotiations and standardizing fee-for-service payments independent of any specific reform proposal, such as single-payer reform and public insurance buy-ins.