Tuesday, January 22, 2008

New payment plan?

Blue Cross Blue Shield of MA is proposing a new optional model for physician and hospital reimbursement. Alice Dembner at The Boston Globe explains, and Bob Oakes at WBUR offers a radio version of the issues involved.

By the way, I have been wondering. Why is it called "reimbursement" in the hospital and physician world? In every other sector, we call it "payment". Can you imagine going to a grocery store and saying to the check-out clerk, "I'd like to reimburse you for this head of lettuce"?

11 comments:

stewie said...

are there more details anywhere? it makes sense to pay PCPs that way, but are they also paying specialists PMPY? or do specialist fees come out of the PCP payments?

rlbates said...

I think it is called "reimbursement" because initially patients did PAY the doctor/hospital and then they got "reimbursed". The term stuck even after doctors/hospitals began submitting the bills for patients and "accepting assignment of payment".

Paul Levy said...

stewie,

One fee per patient per year, allocated among PCP and specialists in some manner, by somebody.

nonlocal MD said...

Frankly I have long thought that forcing a "shotgun marriage" between doctors and hospitals, and between primaries and specialists, by paying them together is the only way to go in the long term; it's the only way to align the incentives and provide the continuity described in the Globe article. However, as usual the devil is in the details, and I would favor a system more similar to that described in Porter's book "Redefining Health Care" - where the payment is made per medical condition based on the best value care (outcome per dollar spent), rather than a flat payment per year. The latter does resemble capitation too much; been there; failed that.
Not that I am totally endorsing Porter's system either; it would be too hard to implement. There must be a happy medium somewhere, but the bottom line is the docs and hospitals have to be married, distasteful as it may seem to both.

Rick Narad said...

I've also wondered where "reimbursement" came from. Could there be any linkage with retrospective payment of hospitals?

Rlbates' suggestion makes sense but I've always assumed that the term was used to make sure that we didn't imply physicians were in business to get paid.

/Rick Narad

Peter S said...

I think it's call "reimbursement" because that's what it used to be. Hospitals got reimbursed by payers according to their allowable costs (which varied in arcane ways from payer to payer). As we all know, cost-based reimbursement did little to control expenses, and created all kinds of opportunities for creative allocation of costs to maximize reimbursement. Although cost-based reimbursement was abandoned years ago, the terminology persisted. Maybe it's an indication of some subliminal desire on the part of providers to return to the good ole days.

Jane Sherwin said...

Alice Dembner's article in the Globe gives an example of a cardiac patient sent home for care and monitoring. This is a good example of the increasingly important role of home medical care in patient health and in cost management. As a writer with home health care clients, I'd like to see more discussion of home medical/health care and its place in the health care debate.

John Droney said...

While we're on language, isn't it interesting that insurers/payors refer to the $$ spent on MD and Hospital services as their "medical loss ratio?"

Anonymous said...

Terms like "medical loss ratio" are why I believe insurance companies don't belong in health care. Their whole attitude and orientation are wrong for the job they are supposed to be doing. It's not that I necessarily favor a single payer system; it's that companies whose stated mission is to find their customers(patients) the BEST VALUE care are needed. These are not insurance companies. It's like trying to teach a horse to moo.

Jean said...

"Medical Loss ratio" is the indicator that helps make sure that healthcare is ultimately affordable. And that's precisely what insurance companies are for. Without them, the only check-n-balance to ensure healthcare affordability would be government price setting for healthcare services ---- and btw, that would definitely be called "reimbursement" because the government would not pay a single dime above the actual cost that providers incurred --- in fact today they are paying less than cost.

anon 2:09 said...

No, Jean, you mistake my point. I didn't say NO company should be involved; I said Insurance companies (which have embedded in their DNA the attitude that having to pay for things is a "loss") should not be involved. There is room for another, brand new, type of company that would function as a patient advocate or care management company and be paid for that service - but NOT by avoiding paying for care or picking the healthiest patients, but by obtaining the care at the best value, defined as the best outcome per dollar spent. It's necessary to think outside the same old box of either/or - either insurance companies or single (government) payor.