Gain sharing becomes more viable. Some of the traditional legal barriers to gain sharing arrangements are dissolving.
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Cost Control↗
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Results for “Reimbursement, Incentive”
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The perfect storm, Part II.
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Credentialing↗
[A system of compensation and incentives in the hospital].
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Economics, Hospital↗
Funding system incentives and the restructuring of health care.
The 1970s and 1980s were decades of rapid growth in health care services and expenditures in Canada. Numerous government sponsored reports laid our principles for restructured health services delivery. These principles included directions such as community orientation, continuity of care and health promotion. The principles were similar, and so were the results: throughout Canada there has been limited action on these principles.
Capitation Fee↗
How do HMOs achieve savings? The effectiveness of one organization's strategies.
OBJECTIVE: To examine how a group practice used organizational strategies rather than provider-level incentives to achieve savings for health maintenance organization (HMO) compared to fee-for-service (FFS) patients. DATA SOURCES/STUDY SETTING: A large group practice with a group model HMO also treating FFS patients. Data sources were all patient encounter records, demographic files, and clinic records covering 3.5 years (1986-1989). The clinic's procedures to record services and charges were identical for FFS and HMO patients. All FFS and HMO patients under age 65 who received any outpatient services during approximately 100,000 episodes of the seven study illnesses were eligible. STUDY DESIGN: Using an explanatory case design, we first compared HMO and FFS rates of resource utilization, in standardized dollars, which measured the impact of organizational strategies to influence patient and provider behavior. We then examined the effect of HMO insurance and organizational measures to explain total outpatient use. Key variables were standardized charges for all outpatient services and the HMO's strategies. PRINCIPAL FINDINGS: Patient and provider behavior responded to organizational strategies designed to achieve savings for HMO patients; for instance, HMO patients used midlevel providers and generalists more often and ER and specialists less often. Overall HMO savings, adjusted for case mix, were explained by the specialty of the physicians the patients first visited and appeared to affect patients with average health more than others. CONCLUSION: Organizational strategies, without resort to differential financial incentives to each provider, resulted in lower rates of outpatient services for HMO patients. Savings from outpatient use, especially for common diseases that rarely require hospitalization, can be substantial.
Adult↗
Medicare home health reimbursement alternatives: access, quality, and cost incentives.
This paper presents a conceptual analysis of access, quality, and cost containment incentives created by several current and potential Medicare reimbursement methodologies. The alternatives examined are methods used by health maintenance organizations (HMOs) and three options receiving national policy consideration: prospective per-visit and per-episode payment, and "bundling." The analysis found better incentives (from a policy perspective) for HMOs with integral home health units than for HMOs using outside contractors. Of the other options, per-episode payment appeared most promising, but requires accurate case mix adjustments. All approaches also require quality assurance tailored to reimbursement incentives. Topics for further research and demonstrations are suggested.
Cost Control↗
Internal market systems in Sweden: seven years after the Stockholm model.
BACKGROUND: Sweden, like other European countries in the 1990s introduced internal market reforms in the delivery of health care. Specifically, in Stockholm county, the Stockholm model was introduced to strengthen the position of patients in their choice of care. Other reform measures introduced included the family doctor's legislation, care guarantee and the adel reform. This paper reports interviews with Swedish physicians, politicians and health economists seven years after the introduction of these reforms. The broader goals of this paper are to explore the extent to which these changes have overtime affected the views of physicians as they reflect on their working conditions and experiences with the use of the diagnostic-related groups (DRG) system. METHODS: Data was obtained from in-depth interviews of 15 primary care physicians, 4 heads of hospital departments (surgery), 5 county council members and 4 health economists (N = 28). A content analysis was performed on major themes on the interview transcripts. RESULTS: The majority of our respondents reported that the financial incentives introduced through performance-based reimbursements do exist in Stockholm county and that productivity and efficiency have increased over the period of investigation. Primary physicians voiced support for the privatization process in health care delivery. Most physicians reported that they were generally satisfied with their work. Over half of the general physicians complained about their working conditions but felt they have a unique way to play as 'gatekeepers' in the overall Swedish health care delivery system. CONCLUSION: Our findings suggest that physicians are generally satisfied with their working conditions. Over 90% of our respondents support the use of a diagnostic-related group. What is clear though is that the primary care physician's role due to its potential benefit as an agent of cost control is important, but it is not clear that the primary care physicians have made a major contribution to the Swedish health care delivery system as they should be.
Attitude of Health Personnel↗
Doctor discontent.
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Cost-Benefit Analysis↗
Modern medicine?
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Attitude of Health Personnel↗
Nursing home performance under case-mix reimbursement: responding to heavy-care incentives and market changes.
OBJECTIVE: To examine the effect of case mix-adjusted reimbursement policy and market factors on nursing home performance. DATA SOURCES AND STUDY SETTING: Data from Medicaid certification inspection surveys, Medicaid cost reports, and the Kentucky State Center for Health Statistics for the years 1989 and 1991, to examine changes in nursing home performance stemming from the adoption of case mix-adjusted reimbursement in 1990. STUDY DESIGN: In addition to cross-sectional regressions, a first-difference approach to fixed-effects regression analyses was employed to control for facility differences that were essentially fixed during the survey years and to estimate the effects of time-varying predictors on changes in facility expenditures, efficiency, and profitability. PRINCIPAL FINDINGS: Facilities that increased the proportion of Medicaid residents and eliminated excess capacity experienced higher profitability gains during the beginning phase of case-mix reimbursement. Having a heavy-care resident population was positively related to expenditures prior to reimbursement reform, and it was negatively related to expenditures after the case-mix reimbursement policy was introduced. While facility-level changes in case mix had no reliable influence on costs or profits, nursing homes showing an increased prevalence of poor-quality nursing practices exhibited increases in efficiency and profitability. At the market level, reductions in excess or empty nursing home beds were accompanied by a significant growth in home health services. Moreover, nursing homes located in markets with expanding home health services exhibited higher increases in costs per case-mix unit. CONCLUSIONS: Characteristics of the reimbursement system appear to reward a cost minimization orientation with potentially detrimental effects on quality of care. These effects, exacerbated by a supply-constrained market, may be mitigated by policies that encourage the expansion of home health service availability.
Certification↗
Balancing incentives. How should physicians be reimbursed?
The May 15, 1991, JAMA theme issue presented 14 different proposals for reforming the US medical care system. Though these proposals varied widely, they encompassed only three proposed methods for paying physicians: fee-for-service, salary, and capitation. When examined from a perspective that considers the incentives affecting practicing physicians, each of these methods has serious flaws. I outline these flaws and suggest an alternative method for reimbursing primary care physicians: that of combining capitation and fee-for-service. Specialists would be paid fee-for-service, but the cost of specialty care would be limited by giving each primary care physician a budget for such care. Consistent failure by a physician to stay within the budget would result in ongoing review, but not in direct financial sanctions. This system of reimbursing physicians is intended to balance incentives so that physicians can concentrate on making medical decisions with a minimum of distraction by third parties and by personal financial considerations.
Capitation Fee↗
Care for the chronically ill: nursing home incentive payment experience.
Nursing home reimbursement systems which do not adjust payment levels to patient care needs lead to access problems for heavy-care patients. Unnecessarily long and costly hospital stays may result. A patient-based nursing home incentive reimbursement system has been designed and is being evaluated in a controlled field experiment in 36 California skilled nursing facilities. Incentives are paid for admitting heavy-care patients, meeting outcome goals on some patients, and discharging and maintaining some patients in the community. This article describes a nursing home reimbursement system which is intended to simultaneously mitigate problems of restricted access, inefficient use of beds, and nonoptimal care. It also discusses the approach to evaluating this broad social intervention by application of a controlled experimental design.
California↗
On a policy of transferring public patients to private practice.
We consider an economy where public hospitals are capacity-constrained, and we analyse the willingness of health authorities to reach agreements with private hospitals to have some of their patients treated there. When physicians are dual suppliers, we show that a problem of cream-skimming arises and reduces the incentives of the health authority to undertake such a policy. We argue that the more dispersed are the severities of the patients, the greater the reduction in the incentives will be. We also show that, despite the patient selection problem, when the policy is implemented it is often the case that health authorities decide a more intensive transfer of patients to private practice.
Benchmarking↗
Pay for performance in commercial HMOs.
BACKGROUND: Pay for performance has increasingly become the subject of intense interest and debate, both of which have been heightened as the Centers for Medicare and Medicaid Services moves closer to adopting this approach for Medicare. Although many claims have been made for the effectiveness of this approach, the extent of its national penetration remains unknown. METHODS: We surveyed a sample of 252 health maintenance organizations (HMOs) (response rate, 96%) drawn from 41 metropolitan areas across the nation about use of pay for performance. We determined the prevalence of pay-for-performance programs, detailed the features of such programs, and examined the adoption of pay for performance as a function of the characteristics of both the health plans and markets. RESULTS: More than half the HMOs, representing more than 80% of persons enrolled, use pay for performance in their provider contracts. Of the 126 health plans with pay-for-performance programs, nearly 90% had programs for physicians and 38% had programs for hospitals. Use of pay for performance was statistically associated with geographic region, use of primary care providers (PCPs) as gatekeepers, use of capitation to pay PCPs, and whether the plans themselves received bonuses or penalties according to performance. CONCLUSIONS: Pay for performance is now commonly used by HMOs, especially those that are situated to assign responsibility for a particular patient to a PCP or medical group. As the design of Medicare with pay for performance moves forward, it will be important to leverage the early experience of pay for performance in the commercial market.
Contracts↗
Dispelling managed care myths.
A number of ideas regarding managed care and capitation are commonly accepted as truths. In reality, however, these ideas are half-truths or myths. Healthcare providers need to challenge some of these myths in order to respond proactively to change. Some of the traditional thinking about managed care that needs realignment includes the belief that PHOs essentially are transitional vehicles and not viable, long-term solutions; that the incentives under fee-for-service payment conflict totally with the incentives under capitation; that under global capitation, the best method for paying primary care physicians is capitation and the best way to pay specialists is discounted fee-for-service; and that small, exclusive physician panels are the most successful for managed care.
Capitation Fee↗
Are your economic incentives self-defeating?
In a prior column (Long, H., "Group Practices May Ignore Economic Realities: Commingling of Rents and Returns," Physician Executive 14(5):33-35, Sept.-Oct. 1988), the author discussed the tendency of many group practices to ignore ordinary business economics. The examples discussed in that column was the inappropriate commingling of rents and returns from the various factors of production in medical practice. A frequent result of this is physicians who also have ownership interests and/or managerial responsibilities having an inflated perception of their worth as physicians because they are undercompensated for their ownership/management roles. In this column, the author addresses the inadvertent structuring of physician remuneration via income distribution or externally negotiated formulas that reward individual behavior that actually threatens the economic viability of the group.
Health Maintenance Organizations↗
New Jersey experiment. Eight hospitals will participate in CMS 'gainsharing' project, in which doctors can earn bonuses of up to 25% on Medicare fees.
A CMS project will let doctors earn bonuses for helping hospitals cut inpatient costs, using software designed by Michael Kalison, left. But not everyone is excited about the plan, including U.S. Rep. Pete Stark, the California Democrat who championed the physician self-referral legislation the CMS is waiving for the program.
Centers for Medicare and Medicaid Services, U.S.↗