HM820 - Class 4 (Payment Reform) Flashcards
What is a “never event”
An event that is never supposed to happen - like leaving scissors in someone during surgery
What does Managed Care refer to
When the insurer is directly involved in care.
Example of why managed care was implemented in the US: You run an insurance plan that is losing money due to the inefficient use of care. Your beneficiaries are having three annual physicals a year, unnecessary MRI scans, CT Scans for minor injuries, filling thousands of prescriptions for Jublia, so on and so forth.
What are the five main tools insurers use for managed care
1) Gate Keeping
2) Prior Authorization
3) Exclusion
4) Selective Contracting
5) Step therapy
What is Gate Keeping
A tool for managed care - requiring beneficiaries to visit a primary-care physician before seeing a specialist.
(A tool for managed care)
What is Prior Authorization
Requiring the beneficiary to ask for permission before a procedure or medication.
(A tool for managed care)
What is exclusion
When insurers decide to simply not cover the product or service.
(A tool for managed care)
What is Selective Contracting
Only covering certain hospitals or medical practices “in network.”
(A tool for managed care)
What is Step Therapy
Requiring that the beneficiary try preferred drugs before more-expensive alternatives.
Does managed care increase or decrease induced demand
Managed care can reduce induced demand.
Do doctors and patients like managed care?
No! Both doctors and patients dislike managed care.
Fun fact about managed care..
Research suggests that managed care plans lower costs and don’t seem to hurt patients. AND Managed care is now the norm.
What does the Medicare Prospective Payment System refer to?
Providers now get a lump sum upfront through the DRG system
- Patients divided into 500 DRGs, and then the hospital receives a lump sum based on the DRG
What are some key potential hospital responses to prospective payment system (getting a lump sum up front for patients )
- Upcoding: code patients in the more-lucrative upper DRGs
- Stinting: provide too little care
- Cream skimming: try to attract more-lucrative patients
What did the 1983 shift to DRG’s do to the length of time Medicare recipients spent in the hospital?
It decreased length of stay in hospitals
What did the adoption of electronic medical records do to the share of patients in the top DRGs?
It increased patients (because more information was available so they were able to upcode more)
Keep in mind! There is no solution for the healthcare system ONLY TRADEOFFS
Example:
Fee-For-Service Payments: Induced demand
or
Lump-Sum Payments: Stinting and Cream skimming
What are some key issues with physician bonuses (pay for performance)
Cream skimming: only treating certain patients
Multi-tasking problems: physicians reducing effort on untracked measures so as to increase effort on tracked measures (that they get bonuses on)
Gaming: for instance, strategic use of exception reporting
What does Multi-tasking problems refer to?
When physicians focus on patients that will give them the bonus - vs the ones that might not.
A risk in Pay for performance
The physicians are NOT multitasking
In other words, physicians reducing effort on untracked measures so as to increase effort on tracked measures (that they get bonuses on)
What happens in a “fee for service” system
Induced demand
AND:
Prescribing inappropriate services, the fraudulent upcoding of visits and procedures, and the churning of ‘ping-pong’ referrals among specialists.
What happens in a “capitation” system
Cream Skimming and Stinting
Capitation rewards the denial of appropriate services, the dumping of the chronically ill, and a narrow scope of practice that refers out every time-consuming patient.
What happens in a “salary” system
Salary undermines productivity, condones on-the-job leisure, and fosters a bureaucratic mentality in which every procedure is someone else’s problem.
What is a “capitation” payment system
Capitation - a fixed amount of money paid to a health care provider for each patient enrolled in a capitated insurance plan. Per capita - per person
