The Good, the Bad
In its June 2008 report to Congress, MedPAC called for Medicare to test bundled payments. The commission noted that a global payment could "reward both desirable and undesirable behavior."
Desirable Behavior
- Providers would have the incentive to reduce unnecessary physician services during a hospitalization.
- Hospitals could compensate physicians for using fewer resources, thus reducing length of stay.
- Providers would be encouraged to find ways to reduce readmissions and other post-discharge costs.
Undesirable Behavior
- Hospitals could reward physicians who generate more admissions, leading to a race to increase volumes.
- Some hospitals will be better able to pay physicians than others, forcing those in the latter group to redirect resources from other areas to create attractive financial arrangements.
- Providers seeking to profit could provide "inappropriately low" levels of service.
- Given that risk adjustment is "imperfect," physicians may avoid certain groups of patients.
This article 1st appeared in the December 2009 issue of HHN Magazine.
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