Is it too soon to pay on 'value' or 'quality'?


So, some members of Congress want to judge Medicare inpatient hospital bills completely on performance rather than per service. Wow...file that one in the hall of questionable ideas. Folks, I don't know about you, but I'm pretty skeptical about the idea that Medicare--or any other health plan--can successfully pay completely on "quality" rather than per service.

Of course, I understand the motives Sens. Baucus and Grassley must have in proposing such a scheme (as everyone is well aware that paying for services can create terribly perverse incentives). This is taking a giant leapfrog jump over pay-for-performance and into value-based purchasing, which in theory avoids creating those incentives. But Senators, with all due respect, we simply aren't there yet as an industry.

If nothing else, what's got to happen is that a great deal of administrative preparation must take place (including large investments on the IT side) before healthcare providers can meet the required standards for such a scheme. After all, providers will have to monitor, measure and study long-term trends in how they perform on a completely new level, one which calls for time, talents and equipment that are costly and also in short supply.

Medicare, and every other health plan, should be keeping their eye on quality and incentives for high performance. But if we try to force the matter now, I'd argue, we'll only make providers scramble in a way that could actually endanger patients over the short term. Let's walk before we try to run. - Anne

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