US healthcare cost is constantly rising. There are several factors that contribute to the rise. One is the uninsured. Individuals that don’t have insurance cost the hospitals more money, therefore the government assists the hospital with those costs. Another factor is that a great deal of the population is diagnosed with preventable diseases. These preventable diseases such as diabetes, hypertension, and other chronic conditions have high maintenance costs that attribute to the overall health care cost (AMA healthcare$$). According to the American Medical Association (AMA) data from the 2008 National Health Expenditure Account states that the US spends two trillion dollars per year, in health care cost. An average person health care cost estimates to be $7,681. Not only has the cost increased, but the quality has descended. The goals of the US health system are to improve quality of care, reduce cost, and reduce health disparities. To motivate health providers to increase their quality, and reduce socioeconomic disparities, performance reporting has discovered to be of common use for motivation (Friedberg). Policy makers, private, and public health insures such as Medicare and Medicaid have adopted a program that they believe to reduce the cost, and improve the quality of health care. This program is Pay for performance. Pay for performance (P4P) programs promise to improve quality, reduce cost, and higher income for health providers. Pay for performance is about rewarding incentives to physicians, hospitals, and other healthcare providers for quality of care. These programs are developed by health plans such as commercial insurances, government insurances, and private insurances that will be evaluating healthcare providers: ... ... middle of paper ... ...information technology that allow electronic medical records to be created and sent. Some health plans such as Medicare has plans to include incentives to promote the use of Health Information Technology (HIT) in P4P programs. Last standard component is patient experience (patient satisfaction) measures, these measures at times can be controversial. The patient experience measures are reflecting the values that patients place in the service or consumption of health care. Physician communication is a main approach in patient experience. There are some skeptics that question the usefulness of patient experience measures. (Hahn, 2006) Works Cited Hahn, J. (2006). Pay-for-Performance in Heath care. Washington D.C. : Congressional Research Service, The Library of Congress. James, J. (2012, Octorber 12). Health Policy Brief: Pay-for-Performance. Health Affairs.
This group is more focused on satisfaction, access and quality of care. Providers, or practitioners, are also key stakeholders within an organization. The term provider can encompasses not only physicians and surgeons, but also nurses, physical and occupational therapists, technicians, and other members of a clinical staff. Providers fall into two categories, primary, which includes hospitals and health departments and secondary, which includes educational institutions and pharmaceutical companies. Providers are focused on the best treatments for patients and are involved in delivering health services and products. The final element of the MCQ model is the employer who by far is the largest paying and purchasing stakeholder of an organization. The employers focus is primarily on their return on investment within an organization. Cost and quality is a focus for employers when choosing health benefits but are mindful that access is just as important. Within the Patient Healthcare model, MCQ explains the interactions between the four elements of employer, patient, provider and payer while the Iron Triangle focuses on the factors of cost, quality, and access. The Patient Healthcare model charges healthcare leaders with the task of balancing satisfaction with the stakeholder (employer, patient, provider, and payer) in relation to cost, quality and access. This may be very difficult since stakeholders may have competing priorities. Changes and variations made in how healthcare organizations operate may have profound effects on how stakeholders perceive the quality, access and cost. For instance, a patient may consider cost to be a top priority when seeking healthcare and at the same time the healthcare organization may consider raising costs and therefore devaluing access and quality. Patients who begin to incur high out-of-pocket costs may begin to perceive a financial
With the passage of the Affordable Care Act (ACA), the Centers for Medicare and Medicaid Services (CMS) has initiated reimbursement based off of patient satisfaction scores (Murphy, 2014). In fact, “CMS plans to base 30% of hospitals ' scores under the value-based purchasing initiative on patient responses to the Hospital Consumer Assessment of Healthcare Providers and Systems survey, or HCAHPS, which measures patient satisfaction” (Daly, 2011, p. 30). Consequently, a hospital’s HCAHPS score could influence 1% of a Medicare’s hospital reimbursement, which could cost between $500,000 and $850,000, depending on the organization (Murphy, 2014).
The federal government has taken a stance to standardized care by creating incentive programs that are mandated under the Health Information Technology for Economic and Clinical Health Act (HITECH) of 2009. This act encourages healthcare providers and healthcare institutions to adopt Meaningful use in order to receive incentives from Medicare and Medicaid. Meaningful use is the adoption of a certified health record system that acquires or obtains specified objectives about a patient. The objectives or measures are considered gold standard practices with the EHR system. Examples of the measures include data entry of vital signs, demographics, allergies, entering medical orders, providing patients with electronic copies of their records, and many more pertinent information regarding the patient (Friedman et al, 2013, p.1560).
Pay-for-performance (P4P) is the compensation representation that compensates healthcare contributors for accomplishing pre-authorized objectives for the delivery of quality health care assistance by economic incentives. P4P is increasingly put into practice in the healthcare structure to support quality enhancements in healthcare systems. Thus, pay-for-performance can be seen as a means of attaching financial incentives to the main objectives of clinical care. However, reimbursement is a managed care payment by a third party to a beneficiary, hospital or other health care providers for services rendered to an insured or beneficiary. This paper discusses how reimbursement can be affected by the pay-for-performance approach and how system cost reductions impact the quality and efficiency of healthcare. In addition, it also addresses how pay-for-performance affects different healthcare providers and their customers. Finally, there will also be a discussion on the effects pay-for-performance will have on the future of healthcare.
In December 2011, Texas Health and Human Services Commission (HHSC) received federal approval of a Medicaid Section 1115(a) Demonstration Waiver, entitled “Texas Healthcare Transformation and Quality Improvement Program,” for the period starting with December 12, 2011 through September 20, 2016. The main objective of the 1115 Waiver is to improve access to and quality of health care by expanding Medicaid managed care programs and promoting health care delivery system reforms while containing cost growth. Specifically, the Waiver created two new pools of funding—Uncompensated Care (UC) and Delivery System Redesign and Innovation Payment (DSRIP) pools—by redirecting funds that were available under the old Upper Payment Limit (UPL) payment methodology. DSRIP funding is used to offer financial incentives to health care providers that develop and implement projects aimed at improving how care is delivered to low-income populations. Specifically, the providers (often referred to as the “performing providers” or “performers”) propose and execute projects like programs, strategies, and investments designed to enhance access to health care, quality of health care, cost-effectiveness of services, and health of the patients and families served.
Meaningful Use and the EHR Many new technologies are being used in health organizations across the nation, which are being utilized to help improve the quality of health care. Electronic Health Records (EHRs) play a critical role in improving access, quality and efficiency of healthcare ("Electronic health records," 2014). In order to assist in expanding the use of EHR’s, in 2011 the Centers for Medicaid and Medicare Services (CMS), instituted an EHR incentive program called the Meaningful Use Program. This program was instituted to encourage and expand the use of the HER, by providing health professionals and health organizations yearly incentive payments when they demonstrate meaningful use of the EHR ("Medicare and Medicaid," 2014).
Miller, H. D. (2009). From volume to value: better ways to pay for health care. Health Affairs
On a global scale, the United States is a relatively wealthy country of advanced industrialization. Unfortunately, the healthcare system is among the costliest, spending close to 18% of gross domestic product (GDP) towards funding healthcare (2011). No universal healthcare coverage is currently available. United States healthcare is currently funded through private, federal, state, and local sources. Coverage is provided privately and through the government and military. Nearly 85% of the U.S. population is covered to some extent, leaving a population of close to 48 million without any type of health insurance. Cost is the primary reason for lack of insurance and individuals foregoing medical care and use of prescription medications.
Hicks, L. (2012). The Economics of Health and Medical Care (6th Ed.). Sudbury, MA: Jones and Bartlett Publishers.
The current health care reimbursement system in the United State is not cost effective, and politicians, along with insurance companies, are searching for a new reimbursement model. A new health care arrangement, value based health care, seems to be gaining momentum with help from the biggest piece of health care legislation within the last decade; the Affordable Care Act is pushing the health care system to adopt this arrangement. However, the community of health care providers is attempting to slow the momentum of the value based health care, because they wish to maintain their autonomy under the current fee-for-service reimbursement system (FFS).
In order to make ones’ health care coverage more affordable, the nation needs to address the continually increasing medical care costs. Approximately more than one-sixth of the United States economy is devoted to health care spending, such as: soaring prices for medical services, costly prescription drugs, newly advanced medical technology, and even unhealthy lifestyles. Our system is spending approximately $2.7 trillion annually on health care. According to experts, it is estimated that approximately 20%-30% of that spending (approx. $800 billion a year) appears to go towards wasteful, redundant, or even inefficient care.
spends about 15% of its gross domestic product on healthcare, thereby making it the largest sector of the economy” (Goldman, D., & McGlynn, E., 2005). “Americans are not healthier than some of the other developed nations, regardless of these extensive costs” (WHO, 2010). “Almost 40 million Americans are uninsured and about 18% of Americans under the age of 65 receive half of the recommended healthcare services” (Goldman, D., & McGlynn, E., 2005). “Though, quality of care was noted not to vary much in cities with respect to lack of insurance, poverty, penetration of managed care and availability of physicians and hospital beds” (Goldman, D., & McGlynn, E., 2005).
Rising medical costs are a worldwide problem, but nowhere are they higher than in the U.S. Although Americans with good health insurance coverage may get the best medical treatment in the world, the health of the average American, as measured by life expectancy and infant mortality, is below the average of other major industrial countries. Inefficiency, fraud and the expense of malpractice suits are often blamed for high U.S. costs, but the major reason is overinvestment in technology and personnel.
The U.S. expends far more on healthcare than any other country in the world, yet we get fewer benefits, less than ideal health outcomes, and a lot of dissatisfaction manifested by unequal access, the significant numbers of uninsured and underinsured Americans, uneven quality, and unconstrained wastes. The financing of healthcare is also complicated, as there is no single payer system and payment schemes vary across payors and providers.
As of 2013 data, the US per capita government expenditure was $4307 while total per capita expenditure on health spending was $9146, which is 17.1 percent of the GDP (2013) for the total expenditure on health. The annual rate of growth in per capita government spending on healthcare has been roughly 5.1 percent over the past thirty years (WHO, 2015). This rate of spending on health care growing faster than the economy for many years creates challenges ...