Posts Tagged fee-for-service
Maryland and Medicare started a global payment scheme for hospitals January 1, 2014, and data on the program are now being reported (NPR and NEJM). Some success is noted for reducing unnecessary procedures and blunting the rise in costs for Medicare and the 28 Maryland health insurance companies.
Maryland is a small state but has 6 million residents. They have had a cost control system for hospitals for the past 40 years — up until now all insurance companies, except Medicare, paid the same amount for any given hospital service — Medicare paid less.
The “Maryland All-Payer Model” adopted in 2014 had 2 basic elements: 1) Hospitals would be paid the same rate by all payers including Medicare and 2) Hospitals would be paid a global fee rather than the previous “fee-for-service” model. The global fee is adjusted to some degree by quality targets. There is no adjustment for number of services.
Maryland healthcare overall was ranked 17th by the Commonwealth Fund within the 50 states and District of Columbia. But, the hospitals were ranked much lower at 33rd in the category of “Avoidable Hospital Use & Costs”. The All-Payer Model was designed to target the unnecessary services by hospitals.
The Hospitals liked the plan because Medicare would be contributing more money and they could get the same revenue without driving so hard to perform services (like cardiac catheterizations). The insurance companies liked the plan because it reduced risk and potentially could reduce cost — they could make more money.
Doctors are not very happy because they make money by charging fee-for-service associated with many of the services (like cardiac catheterization) — fewer services, fewer charges. Likely, a number of hospital physicians will look for positions elsewhere as services are reduced.
The program seems to be having some effect: the growth in Medicare service continued to rise but was reduced by about 1% whereas nationally the growth increased by 1%. From a patient standpoint the rates of potentially preventable conditions in Maryland made big improvements (except for catheter-related urinary tract infections and foreign bodies left in people after surgery which both had a big increase for unknown reasons).
The obvious future direction is to gradually reduce the payments to hospitals — to mitigate a potential huge windfall profit. Hopefully, quality monitoring will be expanded to make sure the hospitals are not just “studying for the test” and ignoring other areas with less scrutiny. It seems Maryland and Medicare have taken an important step away from fee-for-service. Hopefully other states will follow suit.
It is interesting to note that Colorado will have a ballot question next year to move to a single payer for health care in that state. Similar to Maryland, but circumventing insurance companies all together. Perhaps we are seeing the start of efforts to get rid of fee-for-service which is a huge driver of excess cost in the US health care system.
June 3rd 2015 Kaiser Health News reported the ACA seemed to cause more provider visits for management of diabetes “More Patients, Not Fewer, Turn To Health Clinics After Obamacare”. This is both good and bad.
The “good”: more attention to a patient’s condition is likely to result in better diabetic management, fewer complications, fewer hospitalizations and longer life.
The “bad”: since clinic visits can be billed to insurance, clinics make appointments and make money for each visit. The payment for visits rather than outcome is expensive and a known problem in US healthcare (fee for service). Diabetes can be managed over the phone in many, if not most cases — but there is no money for the provider in that approach. Phone care has a much higher value for the healthcare system and the patient; but, low-cost high-quality (high value) care is not getting the incentive.
The care of diabetics is further compromised by the pharmacy. A key piece of equipment for a diabetic is a glucose meter. The manufacturer almost gives away the meter so they can make huge profits by selling the disposable test sticks. The sticks are not interchangeable, not generic, sold in small lots, each lot sold with a co-pay, each lot requiring a visit to the pharmacy, and the use of gasoline to make the trip. If you don’t have much money the speed-bump turns into a mountain.
The solution: every few years mandate a generic test stick that manufacturers of glucose meters must support. “Uncouple” the meter maker form the test stick maker. And, sell the sticks in lots that last for at least 90 days, and that are sent to the patient by mail. Adjust the payment to providers so that they must contact diabetics by phone to adjust medications at least 2 times per month in order to bill for a medium or high level clinic visit. Also, each provider must obtain patient satisfaction data to prove the adequacy of service.
Addendum: Here is a link to an interesting court case about glucose meters
A good patient portal is wonderful; a bad patient portal is a waste of time. A recent post by Dr. Yul Ejnes suggested portals may not be patient centered and don’t get much use.
An alternative view is that all patient portals NOT are the same. Some have great features and are supported by the providers offering them. Other portals are not much more than advertising — generally something a patient does not revisit. Sadly, many businesses have the latter type of portal — no wonder people don’t flock to medical portals.
Check out your health care provider’s portal. If it does not really provide a benefit then TELL THE PROVIDER, complain, and say other providers do a better job.
Admittedly, a poorly functioning provider office will likely have a poorly functioning portal. Just because the portal lets you send a message to the nurse or provider is no guarantee the response will be helpful.
Large vertically integrated health systems or ACOs have the best chance of a good patient portal. The portal needs monitoring and rules for providers — rules that require questions to be answered the same day. And, that the portal will display lab results within 48 hours, regardless of whether the provider has or has not seen the results. Responses from nurses need to be monitored for accuracy and timeliness — the lazy but profitable response to just make an appointment is not adequate. Integration of pharmacy functions is essential.
Here is a checklist of possible portal features — how does your provider’s portal stack up?
- Responses to online requests take less than 24 hours
- Ask a medical question
- Ask medication related question
- Make a follow up appointment
- Make a same day urgent care appointment
- Get refills on a chronic medication
- Get a message from your provider about test results
- Report drug side effects or drug allergies
- Send a picture of a skin rash.
- Diabetics can send blood sugar results
- Asthmatics can send peak-flow measurements
- Look at your list of medical diagnoses both active and inactive
- See a list of current medications and the diagnosis for which they are prescribed
- Links to drug information about the drugs on the medication list
- Review the providers notes
- Review any test, x-ray or consultation report
- Your provider can send questions to specialists and forward the response to you
- You can print your lab, pathology and x-ray reports
- See your most recent medical summary including past medical history, social history, family history, medications list allergies — and be able to print the report if needed for consultations or to take on trips.
- Request a summary of billing and payment information — including when bills are sent to insurance and when payment is received.
- Pay your bills on-line
- Links to reliable on-line information sources about tests, treatments, drugs, immunizations and diseases. Include a symptom checker — a computerized diagnosis based on symptoms — something to discuss with your doctor.
- Provider office provides training to use the portal.
A provider might say: “I’m not paid for running a portal or answering questions”. That is very true for many providers in the US health care system. But, in systems without fee-for-service billing then portals are a huge driver of efficiency. If a patient’s questions or problems can be resolved via the portal so much the better for both the provider and the patient. The handwriting is on the wall — fee for service is going to go away — the efficiency of portals will be a strong driving force.
Here is the list:
- Pay doctors more
- Let the government pay subsidies to families not covered by the employee’s health insurance.
- Get rid of fee-for-service payments
- Smooth the transition from Medicaid to subsidized health insurance
- Transparent pricing
There are obviously some problems with this “consensus”. To begin with, who is part of the consensus? And who benefits from the 5 suggestions? On the face the ideas seem OK but where is overall cost reduction — the real crux of our health care problem?
So, to address each point:
- Pay doctors more — if the payment is not tied to reducing health care costs and increasing quality then it is money down the drain.
- Covering families — seems simple enough but why should business be exempt from doing what they have traditionally done? Employer insurance needs to cover the whole family — that’s simple.
- Get rid of fee-for-service. Yes that payment method is a problem but there must be an incentive for health care providers to provide a high volume of work and an incentive to do quality work. The simple solution is to pay a health care system (an accountable care organization) to provide care for a large group of people for a yearly fee. The organization must meet quality and budget constraints as opposed to our current “the sky is the limit” fee model.
- Smooth the the transition away from Medicaid. At this point Medicaid is less expensive than standard indemnity plans — why think about a change? If the person enters the workforce the employer just pays the cost — simple. Changing providers is not easy but if quality is uniformly better there would not be such concern.
- Transparent pricing. This is presented to suggest people could decide on what tests and treatments to buy if only they knew the prices — patients have never had the knowledge to make that decision and never will. The transparency of pricing should be the price for ALL the healthcare a person needs per year. Market forces may be helpful on the macro level (like for a healthcare system) but there is no free market for healthcare on the micro level — imagine a person being asked to choose between various methods of treating diabetes or the best way to remove an appendix (the decision is either random or biased by what the very person asking the question tells them).
The U.S. is experiencing something its citizens have not witnessed before: the transition away from population healthcare decisions being made behind closed doors at insurance companies to those decisions being made in the political arena. Other countries experience this all the time — just look at newspaper headlines in the UK or France over the past 20 years!