Lowering hospitals’ Medicare costs proves difficult

Regardless of single payer or multi-payer systems, payment method reform is important in US. and around the world. Nearly anything is better than current U.S fee-for-microtask model. But three things must be aligned:

  • What is the payment unit? Fee for task? Fee for total event? Fee for solution? Fee per member?

  • Who is responsible to delivering the care unit and do they fully accept the responsibility for quality, service and cost?

  • What is the incentive for delivering superior results?

Bundled-payment system did not reduce costs for serious medical conditions

A payment system that provides financial incentives for hospitals that reduce health-care costs for Medicare patients did not lower costs as intended, according to a new study led by Washington University School of Medicine in St. Louis.

The researchers assessed what is called a bundled-payment system, in which hospitals are assigned a target cost for Medicare patients with a given condition. The goal is to keep costs below that target for a patient’s hospitalization plus any care given within 90 days of discharge. The researchers asked whether this bundled-payment strategy would be less expensive than traditional fee-for-service care, which pays health-care providers for every individual service, procedure and doctor visit.

The study, published July 19 in The New England Journal of Medicine, assessed Medicare claims from 2013 through 2015 for more than 100 hospitals that voluntarily participated in the Bundled Payments for Care Improvement initiative, a program run by the Center for Medicare & Medicaid Innovation.



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