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Economic incentives to promote innovation in healthcare delivery.
Clin Orthop Relat Res. 2009 Oct; 467(10):2497-505.CO

Abstract

Economics influences how medical care is delivered, organized, and progresses. Fee-for-service payment encourages delivery of services. Fee-for-individual-service, however, offers no incentives for clinicians to efficiently organize the care their patients need. Global capitation provides such incentives; it works well in highly integrated practices but not for independent practitioners. The failures of utilization management in the 1990s demonstrated the need for a third alternative to better align incentives, such as bundling payment for an episode of care. Building on Medicare's approach to hospital payment, one can define expanded diagnosis-related groups that include all hospital, physician, and other costs during the stay and appropriate preadmission and postdischarge periods. Physicians and hospitals voluntarily forming a new entity (a care delivery team) would receive such bundled payments along with complete flexibility in allocating the funds. Modifications to gainsharing and antikickback rules, as well as reforms to malpractice liability laws, will facilitate the functioning of the care delivery teams. The implicit financial incentives encourage efficient care for the patient; the episode focus will facilitate measuring patient outcomes. Payment can be based on the resources used by those care delivery teams achieving superior outcomes, thereby fostering innovation improving outcomes and reducing waste.

Authors+Show Affiliations

Palo Alto Medical Foundation Research Institute, Health Policy Research, Palo Alto, CA 94301, USA. lufth@pamfri.org

Pub Type(s)

Journal Article

Language

eng

PubMed ID

19543780

Citation

Luft, Harold S.. "Economic Incentives to Promote Innovation in Healthcare Delivery." Clinical Orthopaedics and Related Research, vol. 467, no. 10, 2009, pp. 2497-505.
Luft HS. Economic incentives to promote innovation in healthcare delivery. Clin Orthop Relat Res. 2009;467(10):2497-505.
Luft, H. S. (2009). Economic incentives to promote innovation in healthcare delivery. Clinical Orthopaedics and Related Research, 467(10), 2497-505. https://doi.org/10.1007/s11999-009-0930-7
Luft HS. Economic Incentives to Promote Innovation in Healthcare Delivery. Clin Orthop Relat Res. 2009;467(10):2497-505. PubMed PMID: 19543780.
* Article titles in AMA citation format should be in sentence-case
TY - JOUR T1 - Economic incentives to promote innovation in healthcare delivery. A1 - Luft,Harold S, Y1 - 2009/06/19/ PY - 2008/12/01/received PY - 2009/05/28/accepted PY - 2009/6/23/entrez PY - 2009/6/23/pubmed PY - 2009/10/16/medline SP - 2497 EP - 505 JF - Clinical orthopaedics and related research JO - Clin. Orthop. Relat. Res. VL - 467 IS - 10 N2 - Economics influences how medical care is delivered, organized, and progresses. Fee-for-service payment encourages delivery of services. Fee-for-individual-service, however, offers no incentives for clinicians to efficiently organize the care their patients need. Global capitation provides such incentives; it works well in highly integrated practices but not for independent practitioners. The failures of utilization management in the 1990s demonstrated the need for a third alternative to better align incentives, such as bundling payment for an episode of care. Building on Medicare's approach to hospital payment, one can define expanded diagnosis-related groups that include all hospital, physician, and other costs during the stay and appropriate preadmission and postdischarge periods. Physicians and hospitals voluntarily forming a new entity (a care delivery team) would receive such bundled payments along with complete flexibility in allocating the funds. Modifications to gainsharing and antikickback rules, as well as reforms to malpractice liability laws, will facilitate the functioning of the care delivery teams. The implicit financial incentives encourage efficient care for the patient; the episode focus will facilitate measuring patient outcomes. Payment can be based on the resources used by those care delivery teams achieving superior outcomes, thereby fostering innovation improving outcomes and reducing waste. SN - 1528-1132 UR - https://www.unboundmedicine.com/medline/citation/19543780/Economic_incentives_to_promote_innovation_in_healthcare_delivery_ L2 - https://link.springer.com/article/10.1007/s11999-009-0930-7 DB - PRIME DP - Unbound Medicine ER -