Gainsharing Drives Down Device Prices, Study Shows

Find out why members of the device industry are saying that a controversial model could limit physicians' ability to choose certain products and does not adequately measure the effects on the quality of care.

This article preview is reprinted from "The Gray Sheet" - May 26, 2008

A new study says a controversial payment model that gives physicians incentives to reduce hospital costs generates savings almost entirely by putting pressure on device prices.

The study, published in the May/June issue of Health Affairs, analyzes data from 13 "gainsharing" programs in six cardiac catheterization labs from the fourth quarter of 2001 through 2006.

All of the programs were designed by Goodroe Healthcare Solutions, the only party to gain approval from the HHS Office of Inspector General (OIG) for its gainsharing model.

Physicians and hospitals are typically paid under separate Medicare fee schedules. Gainsharing involves having a hospital pay physicians part of the savings they help the hospital achieve. The practice is generally illegal because of its potential to compromise patient care by giving physicians incentives to reduce services or change patient referral patterns.

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