Public and Private Payments to Providers Flashcards
Under FFS, what are the physician and patient incentives?
- Increase utilization
- Patients get more services
- Providers make more
Explain supplier-induced demand
- FFS
- Physicians influence on patients demand
- amount of demand that exists beyond a market in which patients are fully informed
- Patients often uninformed about if they really need a treatment
Describe a PPO and cost sharing
Managed care modification to FFS
- low cost sharing in network
- high cost sharing out of network
Provider and patient perspective on PPO
Provider perspective:
physicians participate/ accept lower fees in network because PPO guarantees volume (revenue)
Patient Perspective:
Limited provider network= pay a lower premium
This could attract healthier people
Describe a HDHP
a PPO plan with higher deductible, may qualify for health savings account
Describe an HMO
compare to PPO
how unique
the 2 staff models
how are they paid?
type of managed care plan that is more restrictive (small networks and use gatekeepers) than PPO because physicians pay = capitated
IPA: Independent Practice Association not employed by HMO but negotiate PBPM
Staff Model: employ physicians
Majority of physicians have some form of a managed care contract (usually a mix)
Gatekeepers: Reduce utilization
Describe point of service (POS)
How is it different from a HMO?
type of managed care plan that is less restrictive HMO and slightly more generous (allow out-of-network and higher cost sharing)
Rank plans from least restrictive to most restrictive
HDHP, HMO, FFS, POS, PPO
Rank plans from least restrictive to most restrictive
- FFS
- PPO
- HDHP
- POS
- HMO
Provider incentives under capitation? Any disadvantages?
what setting is capitation used frequently?
Provider incentives:
-
Reduce patient utilization relative to FFS
- Increases in services provided comes out of provider’s bottom line
- Rewards prevention (keeping patient healthy)
- Disadv: may underutilize care
Capitation used more often for large group practices, primary care
FFS vs Capitation incentives
FFS
- Incentive to encourage more services
- Physician loses if they keep their patient healthy
Capitation
- Incentive to skimp on care (reduce utilization)
- reward physician for emphasizing prevention healthcare
Medicare Payments to Hospitals historically? Problem?
Medicare Payments to Hospitals historically? Problem?
- Cost-based retrospective payment for inpatient services
- Problem:
- Hospitals had an incentive to increase patient utilization because they would be reimbursed for all cost incurred
- Similar to incentives under FFS
Medicare payment system to hospital now?
Medicare payment system to hospital now?
Inpatient Prospective Payment System (IPPS)/DRGs: system put in place since 1984 where there is fixed price per hospital admission with payment varying based on diagnosis (DRG)
Incentives for hospitals under IPPS/DRGs: Quick and sicker
Incentives for hospitals under IPPS/DRGs: Quick and sicker
“Quicker and sicker”
Quicker refers to the incentive to get a patient out quicker, with a shorter length of stay to cut costs
Sicker refers to the incentive to classify a patient as relatively sicker (higher DRG weight), with the CCs or MCCs to, in turn, get a higher payment
What happened when hospital payments were switched from Cost-based retrospective payment to Inpatient Prospective Payment System (IPPS)/DRGs?
What happened when hospital payments were switched from Cost-based retrospective payment to Inpatient Prospective Payment System (IPPS)/DRGs?
- fixed payment per admission reverses incentives towards providing extra inefficient care during admission (compared to cost-based retrospective reimbursement)
- Same argument w/ incentives of FFS vs Capitation
Inpatient Prospective Payment System (IPPS)/DRGs impact on LOS? Problem with the system?
Inpatient Prospective Payment System (IPPS)/DRGs impact on LOS? Problem with the system?
-
Impact:
- Evidence shows reduction in LOS per admission (not the overall #) cost did not lead to worse outcomes
-
Problem with IPPS/DRGs
- Hospitals still have no incentive to reduce the number of admissions
- More admissions= More revenue