Medicare is continually looking at developing approaches to reduce the rising cost of healthcare through demonstration programs or pilot projects. The goal is to find the right formula that reduces the cost of healthcare while improving the quality and accessibility of services. Achieving this goal is mission critical to our country’s future and is a daunting challenge. The national healthcare expenditure is forecast to grow at a compound annual growth rate of 6.8% over the next eight years (2011 – 2019) from $2.7 trillion in aggregate healthcare expenditures to $4.6 trillion over this period. To address this issue, creative solutions need to be developed that substantially move the country to reducing the cost of healthcare services.
One of these approaches to reducing the cost of healthcare while preserving the quality of services is Pay for Performance. The Pay for Performance model reimburses healthcare providers for following prescribed best practices clinical