Outlook for Alternative Payment Modeis in Fee-for-Service Medicare

The financial burden the Medicare program imposes on the federal budget and the national economy is substantial. Medicare's total obligations were 3.5% of the gross domestic product in 2013 and are projected to increase to 5.4% by 2035, primarily due to expected growth in enrollment from 52.3 million to 86.8 million beneficiaries, and will substantially strain the economy and the federal budget. Alternative payment models (APMs), which are built on the existing fee-for-service foundation but include new payments linked to the effective management of a population or episode of care, have been proposed as potential solutions to restrain costs. Here, Clough et al describe the status of the APMs being tested in the Medicare population and the outlook for these models to reduce program expenditures.