A new report published by PricewaterhouseCoopers' (PwC) Health Research Institute recommends that if adoption of healthcare information technology is desired, countries that do not already do so should build incentives for IT investment into their payment formulas.

Information technology has been identified as an effective means of improving efficiencies and better coordinating care, the report notes. However, payers often express concerns about financing advancements in information and medical technology because technology such as better diagnostics to detect illness earlier may lead to increased utilization.

The report "You Get What You Pay For: A Global Look at Balancing Demand, Quality and Efficiency in Healthcare Payment Reform" finds that two-thirds of health leaders, including government and private payers from 20 different countries, see problems with their current payment system.

"Health systems are at risk of a major financial cavitation, and there is a tremendous focus on cutting costs," says Tom Wong, Canadian Healthcare Services Leader for PwC. "But you get what you pay for, as one executive told us, 'If the government paid for Christmas trees, hospitals will produce Christmas trees.' Cutting costs at the expense of quality and efficiency is economically and socially devastating. This is why the right reimbursement model is so vital to future sustainability, and it must be reimbursement that properly aligns incentives versus the current perverse incentive structures that exist today."

The report provides an overview of how payment models are changing in 20 different countries, lessons learned from the experiences of other health systems and findings of a survey of 200 health industry executives including government payers, private payers, hospital executives, and physicians.