What’s Next for the ’Un-Payment’ System?

Karen Minich-Pourshadi, for HealthLeaders Media , July 19, 2010

The HFMA whitepaper offers three ways the government and healthcare providers could approach correcting the current payment system to remedy the cost:

  1. Condition-specific capitation for preventative services and chronic care. This includes periodic payments to a provider for care management, financial rewards for touting preventative services and financial rewards for defined patient outcomes, plus consumer financial incentives for participating in their care.
  2. Episode-of-Care Payment. This includes a healthcare network that receives a global payment or multiple payments to providers for all services a patient needs; payment adjustments for high levels of services as long as outcomes are achieved, and bonuses or payment penalties for providers based on outcomes and satisfaction.
  3. Payment to Support Societal Benefit. Includes the payers in a region making payments to teaching hospitals and for research to cover these costs and payers making separate provider payments to cover the cost of uncompensated care.
  4. In the meantime, the government is attempting to find new ways to drive quality while reducing costs. Its latest venture is the Accountable Care Organization (ACO), which is designed to improve clinical outcomes, care processes, and business performance while simultaneously keeping costs low. The Center for Medicare and Medicaid Services says ACOs are mechanisms to organize care and incent shared saving with the intention of "promoting high quality and efficient service ? for Medicare fee-for-service beneficiaries."

    To be eligible to participate in an ACO, healthcare provider must be willing to become accountable for the quality, cost, and overall care of the Medicare beneficiaries; they must enter into a minimum three-year agreement; have enough primary care physicians to treat 5,000 beneficiaries, and a have a clinical and management system in place. The efficacy of the ACO program remains to be tested, however, more than a few hospitals nationwide are showing interest in participating.

    Payment reform is an ongoing process, however, in its current state many hospitals will continue to lose money and quality will continue to diminish, according to most industry experts. More and more healthcare providers may have to work with payers, the government, and their patients to find an equitable system that pays them for providing high-quality service, and at the same time ensuring that providers don't spend even more to get paid.

    Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.

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