One additional major reform that should take place is regarding reimbursement methods. One of the important issues being discussed in the current health care reform debate is how physicians should be paid. Presently, the reimbursement model of both the government and private insurers is based on a negotiated fixed fee schedule for billed services. For example, if a doctor performs a CAT scan, the doctor will be reimbursed $x. If they perform a natural birth, they are reimbursed $x. It is a set fee negotiated with the insurance provider.
The discussion underway looks at this from a new point of view: pay doctors based on their performance – or rather, the results of their work. For example, if a doctor performs a CAT scan that leads to solving a person's particular issue, they are reimbursed at $A. If the doctor performs a CAT scan that does not lead to solving a person's medical need, they are reimbursed at some amount below $A.
Part of paying doctors for results is also setting up a type of warranty system as proposed by John C. Goodman of the National Center for Policy Analysis.
He stated, “In terms of quality, another obvious free market idea is to have warranties for surgery such as we have on cars, houses, and appliances. Many are surprised to learn that about 17 percent of Medicare patients who enter a hospital re-enter within 30 days – usually because of a problem connected with the initial surgery – with the result that they typical hospital makes money on its mistakes. In order for a hospital to make money in a system based on warranties, it must lower its mistake rate. Again, the goal of our policy should be to generate a market in which doctors and hospitals compete with each other to improve quality of care and cut costs (footnote 1).”
Surely this will be an important discussion but is one that far exceeds my comprehension of billing or the scope of this work. The factors involved are complicated.
However, this is an option that has great merit. In approaching this topic, it is important to remember that it does not have to be one way OR the other. Insurers can offer different plans that use these different models. Those plans who use the pay for performance model would be purchased at a lower price because it could be assumed that this system would reduce waste and increase results. However, the other option could still be available for the consumer who desired a more secure system. The cost would reflect that decreased risk. Over time the better product would survive.
No method should be mandated as the sole product or offering. The marketplace is about choice and freedom. This payment option should be widely introduced into the market as an option for the consumer and, whereas this part of the market doesn’t exist, it should be incentivized for a short period of time in order to provide the necessary capital, direction and incentive.
By providing alternatives in the marketplace, competition is increased, prices are lowered and individual's needs are met. By paying for performance, waste is eliminated, prices are reduced, and people’s health is more rapidly improved. This is an easy reform to recommend.
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Footnotes
1. John C Goodman, “A Prescription for Americans Health Care” Imprimis, March 2009, Volume 38, Number 3
The discussion underway looks at this from a new point of view: pay doctors based on their performance – or rather, the results of their work. For example, if a doctor performs a CAT scan that leads to solving a person's particular issue, they are reimbursed at $A. If the doctor performs a CAT scan that does not lead to solving a person's medical need, they are reimbursed at some amount below $A.
Part of paying doctors for results is also setting up a type of warranty system as proposed by John C. Goodman of the National Center for Policy Analysis.
He stated, “In terms of quality, another obvious free market idea is to have warranties for surgery such as we have on cars, houses, and appliances. Many are surprised to learn that about 17 percent of Medicare patients who enter a hospital re-enter within 30 days – usually because of a problem connected with the initial surgery – with the result that they typical hospital makes money on its mistakes. In order for a hospital to make money in a system based on warranties, it must lower its mistake rate. Again, the goal of our policy should be to generate a market in which doctors and hospitals compete with each other to improve quality of care and cut costs (footnote 1).”
Surely this will be an important discussion but is one that far exceeds my comprehension of billing or the scope of this work. The factors involved are complicated.
However, this is an option that has great merit. In approaching this topic, it is important to remember that it does not have to be one way OR the other. Insurers can offer different plans that use these different models. Those plans who use the pay for performance model would be purchased at a lower price because it could be assumed that this system would reduce waste and increase results. However, the other option could still be available for the consumer who desired a more secure system. The cost would reflect that decreased risk. Over time the better product would survive.
No method should be mandated as the sole product or offering. The marketplace is about choice and freedom. This payment option should be widely introduced into the market as an option for the consumer and, whereas this part of the market doesn’t exist, it should be incentivized for a short period of time in order to provide the necessary capital, direction and incentive.
By providing alternatives in the marketplace, competition is increased, prices are lowered and individual's needs are met. By paying for performance, waste is eliminated, prices are reduced, and people’s health is more rapidly improved. This is an easy reform to recommend.
________________________________
Footnotes
1. John C Goodman, “A Prescription for Americans Health Care” Imprimis, March 2009, Volume 38, Number 3
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