Moving Away from Fee-for-Service

Even though there are many advances in healthcare innovation, if American health care continues to use the outdated fee-for-service (FFS) model of paying for care, it is expected that by 2020, health care will consume 19.8 percent GDP.  If we paid for high quality care, it might be worth it, but Americans are not receiving recommended care and nearly half of all Americans suffer from chronic disease such as diabetes or hypertension.
In a FFS model, payers reimburse for all services, regardless of their impact on patient health. Little or no countervailing pressure to discourage the delivery of unnecessary services exists in this system. While most patients are shielded from the direct cost of care by insurance, the fear of lawsuits ("defensive medicine") encourages doctors to order any and all tests.

How it Began

During the years prior to WWII, fee-for-service originated as "traditional indemnity" health insurance--you get a service, submit your claim, and your insurer covers your incurred expenses. What used to be called "managed care" emerged around the same time, as prepaid insurance plans. In a prepaid plan, beneficiaries pay a set premium in return for care from a defined network of providers.

Unfortunately, managed care ultimately failed to control health care costs, and increasing restrictions on care led to a political backlash in the late 1980s and 1990s. While managed care plans grappled with increasing cost pressures, providers also saw their margins narrowing, and physicians were left with more work and less autonomy.

Alternatives
Today, new models of care delivery which complement the move away from FFS are underway across the nation. To ensure that our health care system is sustainable, transformation must occur across all sectors--a coherent strategy for "paying for performance" means we need a provider structure capable of accountability, coordination, and timely, data-driven, self-evaluation.

Some examples of payment models that depart from traditional fee-for-service include:

Shared Savings. The Medicare ACOs program from the Affordable Care Act utilizes a shared savings payment model. Shared savings financially rewards providers who come in under a yearly "benchmark" spending goal and adhere to quality standards.

Episodic or Bundled Payment. Instead of reimbursing per service, bundled payments give providers a lump sum that represents expected costs for a particular episode of care, such as a heart attack. Bundled payments encourage providers to eliminate unnecessary tests and services, while still achieving a good outcome for the patient's health issue.  Read this article for more details. 

Have you heard of other payment models that are reducing patient costs and improving quality of care?   Are you optimistic about the move away from fee-for-service models?

Books Mentioned in The Atlantic article

In class we continued the discussion about patient-centered care, but from the point of the view of the doctor, and cited Meghan O'Rourke's article in The Atlantic, "Doctors Tell All and It's Bad".

Here are the list of books by doctors mentioned in the article, with links to their websites, books, and book reviews.  I recommend reviewing it further, as there are many interesting links, as well as blogs.

• Dr. Atul Gwande, "The Mortal"
• Dr. Terrence Holt, "Internal Medicine" - NY Times Book Review
• Dr. Sandeep Jauhar, "Doctored: The Disillusionment of an American Physician"
• Dr. Danielle Ofri, "What Doctor's Feel"
• Dr. Barron H. Lerner, "The Good Doctor: A Father, a Son, and the Evolution of Medical Ethics"
• Dr. Charles Kenney & Jack Cochran, "The Doctor Crisis" - Amazon link ("Look Inside")
• Dr. Victoria Sweet, "God's Hotel" - "slow medicine", a memoir 

EMR Adoption Model

Understanding the level of EMR capabilities in hospitals is a challenge in the US healthcare IT market today.  Here is an EMR Adoption Model that identifies the levels of EMR capabilities ranging from the initial CDR environment through a paperless EMR environment.

The stages of the model are as follows:

Stage 0: Some clinical automation may be present, but all three of the major ancillary  department systems for laboratory, pharmacy, and radiology are not implemented.

Stage 1: All three of the major ancillary clinical systems are installed (i.e., pharmacy, laboratory, radiology).

Stage 2: Major ancillary clinical systems feed data to a clinical data repository (CDR) that provides physician access for retrieving and reviewing results. The CDR contains a controlled medical vocabulary, and the clinical decision support/rules engine for rudimentary conflict checking. Information from document imaging systems may be linked to the CDR at this stage.

Stage 3: Clinical documentation (e.g. vital signs, flow sheets) is required; nursing notes, care plan charting, and/or the electronic medication administration record (eMAR) system are scored with extra points, and are implemented and integrated with the CDR for at least one service in the hospital.

The first level of clinical decision support is implemented to conduct error checking with order entry (i.e., drug/drug, drug/food, drug/lab conflict checking normally found in the pharmacy). Some level of medical image access from picture archive and communication systems (PACS) is available for access by physicians via the organization s intranet or other secure networks outside of the radiology department confines. 

Stage 4: Computerized Practitioner/Physician Order Entry (CPOE) for use by any clinician is added to the nursing and CDR environment along with the second level of clinical decision support capabilities related to evidence based medicine protocols. If one patient service area has implemented CPOE and completed the previous stages, then this stage has been achieved.

Stage 5: The closed loop medication administration environment is fully implemented in at least one patient care service area. The eMAR and bar coding or other auto identification technology, such as radio frequency identification (RFID), are implemented and integrated with CPOE and pharmacy to maximize point of care patient safety processes for medication administration.

Stage 6: Full physician documentation/charting (structured templates) is implemented for at least one patient care service area. Level three of clinical decision support provides guidance for all clinician activities related to protocols and outcomes in the form of variance and compliance alerts. A full complement of radiology PACS systems provides medical images to physicians via an intranet and displaces all film-based images.

Stage 7: The hospital has a paperless EMR environment. Clinical information can be readily shared via electronic transactions or exchange of electronic records with all entities within a regional health network (i.e., other hospitals, ambulatory clinics, subacute environments, employers, payers and patients). This stage allows the HCO to support the true electronic health record as envisioned in the ideal model.   

Here's a figure that indicates the percentage of hospitals are have achieved the various stages.  Tucson Medical Center (TMC) is a Stage 7 hospital.  Not an easy thing to do!