Imagine this: A healthcare system where the costs go down, providers’ income goes up, and outcomes are just as good as before and very likely better. In other words, lower premiums for business, improved business for doctors and hospitals, and happier patients all at the same time.

Too good to be true? We’ll soon find out. Hackensack Meridian Health/Hackensack University Medical Center has developed a new system for delivering medical care, and it’s going live on Jan. 1.

Dr. Andrew Pecora, president of Physician Enterprise and chief innovation officer at Hackensack Meridian Health

“This is game-changing stuff,” says HUMC’s Dr. Andrew Pecora, who teamed up with Harvard Business School to figure out how to fix the U.S. healthcare system.

He presented an overview of the plan at NJBIA’s Innovation Summit earlier this year. It was a stunning demonstration in how re-thinking “the way we’ve always done it” can lead to profound changes.

The current system focuses on procedures, such as what tests or operations will be performed, and what follow-up care will be needed. Pecora says this is the wrong approach. Instead, patients’ health should be the bottom line.

“You don’t go to the doctor because you have a problem. You go to the doctor so the doctor can make your problem go away,” Pecora said. “So how about we pay physicians and hospitals for making your problems go away. And those who do it more efficiently, and with more efficacy, and at lower costs, how about if we pay them more.”

Instead of looking at the cost of a procedure, Pecora looks at the cost of making or keeping the patient well. The plan is to assess the different risks associated with a particular treatment, and then determine what a fair price to cure a patient would be.

On Jan. 1, the plan stops being hypothetical; HUMC will put it into practice for breast cancer patients.

The process begins with understanding what treatments will be needed. Pecora asked HUMC’s oncologists to put together treatment “bundles” that provide any and all care for any stage of treatment the patient is in. The breast cancer part has seven bundles, each with its own set price, which is paid up front to the hospital. If treatment is effective, the payment will more than cover the cost and provides an ROI for the hospital. If not, it will be the providers that lose money, not the consumer.

“We accept total risk for all care for a breast cancer patient for a one-year period,” Pecora said. “And not just the breast cancer care, but the plastic surgery, the mammographies, the bone-density studies. Everything.”

Pecora said this system is aimed at reducing or eliminating the $870 billion in healthcare spending that is wasted every year. Under this system, getting prior authorizations or pre-certifications from the insurance company is unnecessary, which makes the procedure less expensive and provides better payments to the doctors because it costs them less to collect it.

If successful, and if it is put into wide enough use, the plan would go a long way to addressing the biggest problem with the American healthcare system—its cost.