Healthcare Reform: A Basic Understanding

Healthcare Reform

Is Healthcare Reform a Cure?

After carefully studying and watching the unveiling of healthcare reform I am, more than ever, convinced two things are true:

1. the only thing that’s really getting reformed is how services are paid for
2. the individual healthcare provider continues to bear the brunt of this “healthcare reform”.

To be fair, government is not the only one to blame. The most basic fundamental problem with American healthcare is gross misalignment of the incentive to maintain health and for health professionals to intervene effectively and efficiently along the entire span of healthcare. Megalithic institutions, masquerading as vertically integrated “health” systems want to continue to protect their bloated, inefficient and marginally effective programs and revenue bases. But, even professional associations seem to have trouble embracing the idea of real change. Physical therapists need look no further than the APTA’s Alternative Payment System.

The Alternative Payment System proposed by APTA leadership continues to focus on payment by the visit. This is a striking example of one of the fundamental tenants of health economics that has continued to plague us since the inception of Medicare: the paying by the encounter incentivizes more encounters; it does not incentivize health, quality clinical outcomes or fairness. It focuses on interventions and clinical judgments about impairments rather than on the complexity of patient problems, the practice and provider resources required to treat and the quality of the clinical outcome and patient experience.

Interestingly, the severity/intensity model lends itself well to an episodic approach to payment for outpatient services. An episodic or case rate approach that uses outcomes measures to stratify clinical outcomes incentivizes just the behavior we want on the part of the patient, therapist and payer. The provider who is more efficient and effective gets the better financial outcome, the patient gets the best chance to get the an improved functional outcome and the payer pays for the outcome – not a volume rewarded approach to health services delivery.

If we were going to set out to design a healthcare reform system we would never come up with what we have now:
• a system that rewards tertiary care over health maintenance
• payment based on the volume of services rendered
• reliance on quality measures that should be part and parcel of every healthcare provider who should have a “primary care” perspective in every patient interaction.

Certainly, “the devil is in the details” of any payment system but shouldn’t we be working towards a system that focuses on the outcome of the entire course of care rather than one that rewards the volume of services rendered with little or no penalty for poor outcomes and patient satisfaction?

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