Patient Care Models

Part 3 of Title III of the PPACA creates incentive for the development of new Patient Care Models. I bet you didn’t know that people already had models of how to care for you, or that perhaps they weren’t good enough. But they do – and given the GDP spent on health care in the US versus the outcomes measures, they aren’t good enough.

Section 3021 creates Centers of Innovation within Medicare and Medicaid. It’s important to keep in mind that we spend ~23% of the US Federal Budget on these two services (2011), and that this is estimated to double in the next 15 years. Innovation is key – and the bureaucracy of a large government is not often known for its incentive in this department. As with all innovation in health care, this center is supposed to come up with ways to make care cheaper while maintaining or increasing quality. You know, no pressure.

One interesting note is that this section explicitly calls out the idea of moving away from a fee-for-service basis to a salary one. Certainly an interesting, and likely, outcome, but also controversial. Most everything else is your current chestnut of efficiencies, best practices identification and dissemination, and team-based care.

Section 3022 creates something called a Medicare Shared Savings program. This creates accountable care organizations out of partnerships between providers, hospitals, suppliers, and other interested stakeholders. The organizations have to have a minimum of 5,000 Medicare beneficiaries. Assuming they meet the quality standards for care, if they can save money doing so, then the ACO is eligible for an unspecified share of the cost-savings.

Section 3023 pilots a program of cost bundling. This is another switch from a fee-for-service model to something called an episode of care. An example of an episode of care would be: Patient feels dizzy and short of breath, goes into the ER. Patient is determined to be having a heart attack, and has a cardiac procedure performed, spends a few days recovering in the hospital. Follow up care is then provided by the surgeon and the cardiologist. Rather than paying for every person, room, and supply individually, the hospital would receive a single payment for that person’s care for this incident, and then dole out the necessary payments to staff and suppliers. By statue, it includes 3 days before the hospitalization, the duration of the stay, and 30 days following.

Clearly this type of payment plan is a departure from the way people are used to doing things, both the patient and the provider. It requires the providers to be paid by the hospital – true in some cases, but certainly not all.

Section 3024 is a pilot program to increase home-based care and change payment structures to benefit it.

Section 3025 introduces a program to reduce hospital readmissions by creating financial incentives for the hospitals to lower them. It’s a stick, rather than a carrot, in that the hospitals will get less money for more readmissions, rather than more money for fewer readmissions.

Section 3026 creates a carrot incentive for increased community-based care transitions programs.

Section 3027 extends the Gainsharing Demonstration of the Deficit Reduction of 2005. You know exactly what that is, right? Oh, you don’t. Well, maybe I’ll tell you. Ok, Ok, I’ll tell you. Related to the Accountable Care Organizations, it is direct payments to physicians and practitioners for improving quality and efficiency. It originally ended in 2009, but is now good through at least 2013.


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