Excerpt: As consensus grows that true reform of the U.S. health care system requires a move away from fee-for-service payments, designing alternative payment methods, including episode-based payments, has emerged as a high priority for policy makers. An episode-based payment approach would essentially bundle payment for some or all services delivered to a patient for an episode of care for a specific condition over a defined period. Ideally, a well-designed episode-based payment system would encourage providers to improve efficiency and quality of care.

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