The underlying premise is simple: Reward doctors and hospitals financially when patients are healthy, not just when they come in sick.


Vermont is setting an ambitious goal of taking its alternative payment model statewide and applying it to 70 percent of insured state residents by 2022 which -- if it works -- could eventually lead to fundamental changes in how Americans pay for health care.

"You make your margin off of keeping people healthier, instead of doing more operations. This drastically changes you, from wanting to do more of a certain kind of surgery to wanting to prevent them," said Stephen Leffler, chief population health and quality officer of the University of Vermont Health Network.

Making lump sum payments, instead of paying for each X-ray or checkup, changes the financial incentives for doctors. For example, spurring the state's largest hospital system to invest in housing. Or creating more roles like Lajoie's, focused on diagnosing problems with housing, transportation, food and other services that affect people's well-being.


Critics, however, worry that it will create a powerful tier of middlemen charged with administering health-care payments without sufficient oversight. Those middlemen are Accountable Care Organizations, networks of hospitals and doctors that work to coordinate care and can share in the rewards if providers are able to save health-care costs, but remain on the hook if costs run too high. In Vermont, the goal is to limit the growth in overall annual health care spending to 3.5 percent each year.

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