Provider Purchasing and Contracting Mechanisms

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The paper reviews various purchasing models and the advantages each offers for purchasing from the private sector. It then identifies the key challenges to successful implementation of these models, and discusses improvements needed in the contracting mechanism itself. It determines that the purchasing mechanism can create new incentives for providers, payers, and consumers on a national scale, but it may require that changes be made in the health sector as a whole for new programs to be successful.