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Pegging Payments to Health Care

WellPoint announces revamp of how it reimburses about 1,500 hospitals nationwide.

By Rick Wartzman | Updated on May 23, 2011

If ever an entire sector of the U.S. economy was guilty of committing one of Peter Drucker’s greatest sins of mismanagement—confusing activity with results—it’s health care.

As the Commonwealth Fund noted in a report last year, spending per hospital visit in the U.S. exceeds that of all other countries belonging to the Organization for Economic Co-operation & Development, and American patients count among the most likely to receive procedures requiring advanced technology. Yet at the same time, the U.S. now ranks in the bottom quartile in life expectancy among OECD countries and has seen the smallest gains in this metric over the past two decades.

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