Tuesday, October 27, 2009

Might Medicare "Bundled Payment" Incentives Influence Patient Care Decisions?

One wonders, might this be construed as a bribe?
Under the pilot project, Medicare is saving 4.4% on the base rates for heart and joint surgeries at Hillcrest because the hospital is offering a discount. For Morrow's knee replacement, for example, the government is paying $13,211, about $450 less than it normally would.

Meanwhile, Morrow, who is eager to get back to playing basketball, gets a portion of the savings from Medicare — $271 as an incentive for going to a hospital that participates in the program.

The three-year experiment, which began in May, is taking place at five hospitals identified by Medicare for high-quality, cost-efficient care. All competed to get into the program by offering discounts to Medicare.

Besides Hillcrest, Baptist Health System in San Antonio is taking part, while hospitals in Denver, Albuquerque and Oklahoma City are expected to begin participating this year.

Patients who use the hospitals for most heart and orthopedic procedures are paid up to $1,157 for participating, with the bigger amounts pegged to more complicated cardiac surgeries, such as heart-valve replacements.

The incentive payment is supposed to help drive higher admissions to the hospitals in the program, and the pilot is designed to test whether paying Medicare beneficiaries from $250 to $1,157 sways their choice of facilities.
I can see it now: having a hard time paying your phone bill? Why, get your knee replaced!

I thought we supposed to be keeping patients out of the hospital?


1 comment:

Keith said...


I hope people don't decide to get knee replacements for the sake of 250 dollars, but since there have been scams (see Edgewater Hospital) where street people were paid to have angiograms before, I can see the possibility.

Clearly, if we are to have true competition on the basis of quality and cost, we need to have some incentive for the patient to make the right choice. there is little quality data for them to make a judgement and no real incentive on the cost side for those covered by insurance. so how otherwise would you propose soving this issue?