Article preview reprinted from Medtech Insight - June 2009
A number of industry experts have long believed that any significant change in health care must be tied to reimbursement, and the Centers for Medicare and Medicaid Services (CMS) has begun a pilot project that will test that theory. Under a three-year plan called the Acute Care Episode (ACE) demonstration, five sites in the US have been selected to use a single, bundled-payment system for hospital and physicians services associated with 28 cardiac and nine orthopedic inpatient surgical services and procedures. Read on...
Article preview reprinted from Medtech Insight - June 2009
Health Care Trends: Payment Bundling--The Future of Reimbursement?
As the movement to reform the US health system advances, it's becoming clear that one of the simplest and longest held beliefs about running an efficient business is going to be key to accomplishing any change. For any business to be successful, incentives must be aligned for all participants, and that certainly has not been the case on the provider side. Although hospitals and physicians seemingly have the same goals, a close examination of the type of coordination that is status quo in the industry makes it apparent that this relationship needs to be fine tuned.
Understanding one of the sources of the disconnect only requires a quick examination of the reimbursement system established under Medicare, which provides health care coverage to close to 45 million beneficiaries in the US. Under this system, physicians are paid one fee for performing a surgical procedure and hospitals are paid a separate fee for hosting that procedure. It's the basic arrangement for Medicare Part A and Part B payments, and it means that measuring the success of a procedure is not the same for the groups involved, from both a medical and a business standpoint.
Of course, positive patient outcomes are always the top priority, but without basic business sense—including fiscal discipline—a provider organization will not be able to survive long enough to continue providing care. Therefore, business considerations—such as device/product costs and time-saving techniques—also must be taken into account, and that's where hospitals and physicians clash in terms of motivation.
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Companies mentioned in this article:
US Department of Health and Human Services, VHA Inc.
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Health Care Trends: Physicians Shift Loyalty to Hospitals in Purchase Negotiations, Medtech Insight 4/2009
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