Payment Reform … Thinking Through The Issues

The more I learn about the key concepts of payment reform and the potential models the more it becomes clear how really complex the options are. In addition, finding ways to explain or reimagine our health care organizations into ones that would function successfully under any one of the proposed models seems daunting. It almost feels like the easy way out based on payment reform uncertainty is to do nothing.

That however, might not be the smartest approach. Based on what I have learned, for most organizations, preparing the organization for change through developing better performance metrics, creating greater understanding of the episodic care provided existing patients/residents/customers and measuring current compliance with best practices will improve the services we provide today. This preparation would not be wasted and will allow us to develop services, operational processes, and infrastructure changes more deliberately and will allow the pace of change required to be more measured.

Before we start to delve into each of the potential models and the key concepts of payment reform I would like to recommend to you a primer on health care payment reform developed by the Network for Regional Healthcare Improvement called From Volume to Value: Transforming Health Care Payment and Delivery Systems to Improve Quality and Reduce Costs.

This paper describes the current payment structures and flaws with each and then explains briefly some of the proposed models, such as bundled payment or condition specific capitation and some of the current demonstrations using these methods. If you are not big on the narrative, take a look at Figures 1 – 10. These diagrams summarize much of the narrative concisely. One of the flaws of this report is that the payment reforms discussed focus on physician services and hospitalizations, leaving out the skilled nursing facility, home health and community-based services.