Although I spent nine years running a hospital, and over twenty years before that in the public policy realm, I still don't understand how policy is made in the health care field. Look at this article from Kaiser Health News about a new approach to Medicare payments:
Medicare took its broadest step yet in moving away from its traditional hospital payment method, finalizing a plan to alter reimbursements based on the quality of care hospitals provide and patients’ satisfaction during their stays.
The initiative is the beginning of a transition from paying hospitals on the basis of the amount of care they provide. Many health care researchers believe this fee-for-service system has encouraged unnecessary care, driving up costs and giving hospitals no incentive to economize.
Let's stop right there. Notice how we are talking about a transition from fee-to-service to some kind of capitated or bundled payment approach. As I have mentioned before, even in way-ahead Massachusetts, no one has produced data to test whether the latter approach makes any difference.
But maybe the reporter was just concatenating two unrelated topics. Here's the actual program:
Under the final rules announced Friday, Medicare will cut payments to hospitals 1 percent and set that money aside for a bonus pool. Hospitals that do better than average on a variety of measurements, or show the greatest improvement from the previous year, would earn bonus payments, totaling $850 million in the first year. The bonus pool would increase to 2 percent of Medicare payments in October 2016.
Here we go again. When you have a hammer, everything looks like a nail.
Is Medicare adopting this approach as a movement away from fee-for-service (as the reporter suggests), or is it simply an approach meant to encourage better quality? If the latter, is it the right approach? Are the dollars significant enough? Are the dollars paid to a hospital a persuasive way to encourage nurses and doctors to do things differently?
I don't know of any hospital administrator who has been successful in motivating doctors and nurses to engage in process improvements by stressing possible impacts on the hospital's bottom line. Indeed, most doctors I have talked to have said that this is the quickest way for them to become uninterested.
Look, doctors and nurses have devoted their lives to alleviating human suffering caused by disease. What is motivational are changes that permit that to be done better. The good news is that improvements in quality and safety also help reduce costs and thereby improve a hospital's bottom line. Captain Sullenberger, Brent James, Lucien Leape, and Spear-Toussaint-Kaplan and others have set forth a very clear agenda as to how to make that possible.
One factor that is missing today, though, is the ability of doctors and nurses to share best practices and learn from their colleagues in other hospitals. But the Joint Commission, which collects these best practices while charging accreditation fees to the hospitals that provide these stories, keeps this information in a locked-up library.
Open note to Dr. Berwick at CMS:
"The Joint Commission has been delegated its powers by your agency. You have given it a license to collect fees from the public. Isn't it time for you to write or call that agency and demand that the Leading Practice Library it has assembled using those fees be made widely available -- to all people in hospitals, and indeed to the public at large?
"You have this hammer, too. Why not pound on a nail that is clearly sticking up?"