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Centers for Medicare & Medicaid Services (CMS) proposed updating their reimbursement policies for physicians and other providers. The old system reimburses providers for services rendered (e.g. procedures, lab tests), and it's no surprise that medical care has ended up oriented around services. The emphasis of the prior reimbursement system likely helped fuel the shortage of primary care doctors, since specialists can generally bill significantly more for their procedures than primary care doctors can for their office visits. The emphasis on services likely also contributed to the decline of coordinated care, since providers weren't actually getting paid to spend time to coordinate care for their patients.

Centers for Medicare & Medicaid Services (CMS) proposed updating their reimbursement policies for physicians and other providers. The old system reimburses providers for services rendered (e.g. procedures, lab tests), and it's no surprise that medical care has ended up oriented around services. The emphasis of the prior reimbursement system likely helped fuel the shortage of primary care doctors, since specialists can generally bill significantly more for their procedures than primary care doctors can for their office visits. The emphasis on services likely also contributed to the decline of coordinated care, since providers weren't actually getting paid to spend time to coordinate care for their patients.

CMS recognizes these issues and is trying to address them by changing their reimbursement model. Their recently publicized proposal considers factors such as quality of medical care and systematizing improvements to clinical practice. In theory, this would give providers stronger financial incentives to care about patient outcomes, rather than simply providing a service and moving on to the next patient. Providers who think they can demonstrate particularly cost-effective overall care for their patients can sign up to share risk. That is, providers whose patients are healthy and require less overall procedures should be compensated better than they currently are, and providers whose patients are not healthy and end up costing the system more will be compensated worse.

It's too early to tell what ramifications this proposal might have (e.g. will doctors who sign up for risk-sharing find ways to exclude sicker patients from their care? ), but on the surface, this proposal seems like a great step in the right direction -- especially when considering how strong of an effect reimbursement policies have on the practice of medicine.

NPR reported that The Centers for Medicare & Medicaid Services (CMS) decided to delay its rollout of a star rating system for hospitals. CMS already offers information about how hospitals perform on a variety of quality metrics. However, the plethora of metrics easily confuses users and the new system is supposed to simplify how consumers can assess hospitals. Hospitals (and others in the provider community) objected to the new system and members of Congress even wrote in to CMS, asking for a delay.

NPR reported that The Centers for Medicare & Medicaid Services (CMS) decided to delay its rollout of a star rating system for hospitals. CMS already offers information about how hospitals perform on a variety of quality metrics. However, the plethora of metrics easily confuses users and the new system is supposed to simplify how consumers can assess hospitals. Hospitals (and others in the provider community) objected to the new system and members of Congress even wrote in to CMS, asking for a delay.

Dr. Jha, who champions greater transparency in health care, was quoted as criticizing CMS for equally weighting the risk of death and the risk of admission. It seems that there are some significant issues with the star rating system. However, it could very well be that the 62 metrics that are used by the new system cannot be neatly summarized into a single rating. If that's the case, CMS and others might need to invest more into user interface design and patient education.

The tide seems to continue to turn in favor of the patient. Recent examples include Geisinger Health System offering refunds for unsatisfactory customer experiences. Besides the financial benefits of customers feeling heard, the health system apparently sees the offering as a system to gather valuable feedback on what needs to be fixed. Likewise, Vivian Lee, the CEO of University of Utah Health Care wrote a piece in Harvard Business Review detailing the health system's efforts to put patient reviews online; the CEO talks about asking patients about what constitutes excellence. Both of these actions show that at least some in the provider community are beginning to recognize the importance of the patient viewpoint; Vivian Lee went so far as to highlight how higher revenue coincided with higher patient satisfaction scores.

The tide seems to continue to turn in favor of the patient. Recent examples include Geisinger Health System offering refunds for unsatisfactory customer experiences. Besides the financial benefits of customers feeling heard, the health system apparently sees the offering as a system to gather valuable feedback on what needs to be fixed. Likewise, Vivian Lee, the CEO of University of Utah Health Care wrote a piece in Harvard Business Review detailing the health system's efforts to put patient reviews online; the CEO talks about asking patients about what constitutes excellence. Both of these actions show that at least some in the provider community are beginning to recognize the importance of the patient viewpoint; Vivian Lee went so far as to highlight how higher revenue coincided with higher patient satisfaction scores.

These are only two of many healthcare institutions; however, they are names that are well-recognized. It remains to be seen whether the provider community at large will adopt similar attitudes, and if so, how long it will take for such attitudes to take root.

Covered California runs California's ACA health insurance exchange and is trying to leverage its clout to impose new conditions on insurers to improve health quality while reducing costs. Working with multiple insurance companies, it seems to be in a better position to facilitate collaboration among them; for example, one of Covered California's proposals is that insurance companies share data not only with doctors, but also with each other. Covered California is also trying to have insurance networks drop providers that are either high-cost or low-quality.

Covered California runs California's ACA health insurance exchange and is trying to leverage its clout to impose new conditions on insurers to improve health quality while reducing costs. Working with multiple insurance companies, it seems to be in a better position to facilitate collaboration among them; for example, one of Covered California's proposals is that insurance companies share data not only with doctors, but also with each other. Covered California is also trying to have insurance networks drop providers that are either high-cost or low-quality.

The move is bold, relative to what others in the industry have done. Part of the controversy, of course, is that people disagree about what quality means and how to assess it. Nevertheless, it seems that insurance companies have had decades to innovate in some of the ways outlined in the proposal, and probably could have accomplished more than they have. A separate objection is that the insurance networks for the relevant plans are already narrow, and that access to medical care may be inadequate if some providers are dropped from the network. It will be interesting to see if Covered California has enough market power to push these changes through.

Recently, there seems to be a lot of media coverage about drug prices getting out of control. Kaiser Health News published one article about an idea of financing expensive drugs through loans, paid off in installments. Some are arguing that these expensive drugs should be covered by insurance. What appears to be happening is that there are certain drugs that are both very expensive and cure a condition (rather than just manage a condition), such as some of the recent drugs for hepatitis C. In many cases, patients with those conditions can live a while without such drugs, and insurance companies have been slow to agree to pay for such treatment until the health of such patients have deteriorated. Insurance companies may even agree that over the long term, paying for the expensive upfront treatment can be worthwhile in theory (saving on health maintenance drugs over many years), but note that patients frequently change insurance plans which undermines the financial calculation. The resulting sub-optimal situation could benefit from a financed solution. There may be other solutions, such as insurance companies agreeing to pay for treatment in exchange for patients agreeing to stay with an insurance plan for a certain number of years; unfortunately, such ideas may be limited because of patients might not have much choice to stay with the same plan if their employers choose to change carriers to save costs.

Recently, there seems to be a lot of media coverage about drug prices getting out of control. Kaiser Health News published one article about an idea of financing expensive drugs through loans, paid off in installments. Some are arguing that these expensive drugs should be covered by insurance. What appears to be happening is that there are certain drugs that are both very expensive and cure a condition (rather than just manage a condition), such as some of the recent drugs for hepatitis C. In many cases, patients with those conditions can live a while without such drugs, and insurance companies have been slow to agree to pay for such treatment until the health of such patients have deteriorated. Insurance companies may even agree that over the long term, paying for the expensive upfront treatment can be worthwhile in theory (saving on health maintenance drugs over many years), but note that patients frequently change insurance plans which undermines the financial calculation. The resulting sub-optimal situation could benefit from a financed solution. There may be other solutions, such as insurance companies agreeing to pay for treatment in exchange for patients agreeing to stay with an insurance plan for a certain number of years; unfortunately, such ideas may be limited because of patients might not have much choice to stay with the same plan if their employers choose to change carriers to save costs.

Meanwhile, the American College of Physicians is reported as protesting high drug prices and as advocating for government intervention. As the chorus around drug prices grows, it'll be interesting to see how industry reacts.