How Outcomes-Based Reimbursement Will Change Healthcare


The government recently released its final revision to the proposed rules governing accountable care organizations (ACOs) http://www.cms.gov/aco/downloads/Appendix-ACO-Table.pdf.  These organizations will herald the beginning of outcomes based reimbursement which will replace volume-based payment systems. Three sub-agencies will be coordinating Medicare and Medicaid payment policies.  The IPAB (Independent Payment Advisory Board) will concentrate on Medicare. It has already been criticized as having too much power for a small board. The Center for Medicare and Medicaid Innovation will be testing new payment and delivery systems, and the PCORI (Patient Centered Outcome Research Institute) is charged with evaluating comparative effective research.

Outcomes based reimbursement has many implications aside from the way money will be distributed.  It will change hospital workflow.  Electronic health records (EHRs) were initially mandated to be in place of 50% of primary care physician practices of an ACO.  The final version no longer retains this requirement but does reward for greater use of EHRs. I view this as a step backwards for two reasons.  EHRs will be the best way to track a patient’s diagnoses and care provided which are crucial in determining what the total reimbursement is and how it is divided.  In addition, if one of the goals of ACOs is better quality, as is the goal of EHRs and then measurement of that quality itself may become more difficult.  There has been a significant shift in the management of hospitals.  Only approximately 4% of hospital CEOs is physicians. If quality of care is determining reimbursement, my money would be on a physician rather than a bean counter. In one study of 300 hospitals, the hospital quality score was 25% higher with physician-run hospitals (and 33% higher if it were a cancer hospital) http://ftp.iza.org/dp5830.pdf.  Therefore, one may consider increasing the number of physician CEOs to this changing environment, where quality is a big determinant reimbursement.

Informatics will be very important.  The gathering of diagnosis-related data regarding care regimens, drug and device utilization, extent and impact of each type of provider, cost, and more will help to hopefully improve care.  This data will be a great source of research to truly evaluate what is and what isn’t evidenced based medicine. This will facilitate comparative effectiveness studies as well. The data, however, will only be as good as the collection tools, the EHR and health information exchange.

Tools which will increase efficiency and improve outcomes will also be sought by institutions (hospitals and post-hospital care facilities).  Wireless health technologies come into play here very nicely. They are cost-effective and the right ones will result in better patient outcomes. A hybrid of technologies will likely be necessary for complex patients with co morbidities.  One can see where an elderly patient with heart disease may require a combination of telehealth, body sensor, and wireless medication-related products. Those platforms which maximize actionable alerts will increase provider efficiency as well.

Probably the biggest change will come about by the continuity that will surround the patient.  Continuity among multiple providers the patient may require, as well as a closer communication, via wireless technologies, between the provider and the health system.  Studies clearly demonstrate that closer follow-up of discharged patients results  in lower rehospitalization rates.

Outcomes-based reimbursement has, as one can see, far-reaching implications in how it will change healthcare. Wireless technologies will play an important role in this transformation.

About davidleescher

David Lee Scher, MD is Director at DLS HEALTHCARE CONSULTING, LLC, which specializes in helping digital health technology companies, their partners and clients. As a former cardiac electrophysiologist and pioneer adopter of remote patient monitoring, he is uniquely qualified to address both clinical and operational concerns of clients. Scher was Chair of Happtique's Blue Ribbon Panel which established standards for certification of medical apps in the categories of safety, operability, privacy, and content. He is a well-respected expert in mobile and other digital health technologies and lectures worldwide on technology and its impact on patients and healthcare systems.
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2 Responses to How Outcomes-Based Reimbursement Will Change Healthcare

  1. Pingback: The Razor » Blog Archive » What a Survey of 1,400 Sued Doctors Can Tell Us About Health Care Reform

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