Payment Innovation

Congestive Heart Failure: A Case Study for Alternative Payment Models

By Meaghan George and Darshak Sanghavi


AHeart1s frontline decision-makers, clinicians can drive reforms to move the U.S. toward a higher value. As those who directly influence the delivery and quality of care, clinicians often have terrific ideas but may not know how to navigate the baffling landscape of health care payment reform—which is critical to sustain changes in practice.

To address this, the Merkin Initiative on Payment Reform and Clinical Leadership—a project from the Brookings Institution—produces a series of case studies and learning opportunities to help clinicians and other health care providers to innovate sustainably.

Today, nearly 6 million Americans suffer from congestive heart failure (CHF), a chronic condition that accounts for one million hospitalizations in the U.S. annually and a staggering $273 billion in direct health care costs¹. The high costs associated with CHF, like many chronic diseases, are driven by our deeply fragmented and uncoordinated health care system. These gaps often result in patients being readmitted to the hospital (nearly a quarter of patients are readmitted to a hospital within 30 days²), seeking care from the emergency room, or suffering from avoidable complications.

The good news is that we know how to improve care and reduce costs for this condition and others like it: shifting from expensive inpatient care to preventing, coordinating, and managing the illness in outpatient settings. That often means making phone calls, performing home visits, ensuring prescriptions are filled, sharing information among providers, arranging patient transportation when needed, and a host of other things that don’t fit into typical hospital- or office-based care.

Unfortunately, almost no one pays for these high value services. To really make better care a reality, alternative payment models have to incentivize proper disease management, care coordination, and other activities that are not currently reimbursed in a fee-for-service, volume-based payment system. To support implementation of these strategies in practices and institutions throughout the country, we profile the experiences of Duke University Health System and University of Colorado Hospital in the upcoming issue of Healthcare. Practical solutions for not only implementing clinical redesign, but an understanding of how those clinical innovations can be aligned with alternative payment models, such as bundled payments or Accountable Care Organizations are described.

This case study provides solutions, key lessons, and policy recommendations to help provide insight to clinicians in other organizations that may be attempting to implement similar strategies. Check out the TedTalk style presentations we call MED Talks that feature experts from the case as they describe firsthand experiences from Duke and Colorado about their CHF care strategies and how they used alternative payment models to support these innovations. Upcoming case studies at the Brookings Institution will soon tackle oncology care and pediatric asthma, among other topics.


1. American Heart Association (2011).Policy Statement: Forecasting the Future of Cardiovascular Disease in theUnited States. Retrieved from 2. Krumholz HM, et al. Patterns of hospital performance in acute myocardial infarction and heart failure 30-day mortality and readmission. Circulation: Cardiovascular Quality Outcomes. 2009;2:407–413.

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