Currently all health care providers are paid on input criteria (diagnosis DRG’s for hospitals, encounters RVU’s for physicians, meditation scripts for pharmacy, RUG’s assessment for skilled nursing, OASIS days of care for home care and outpatient OPPS encounters or ER)  not output criteria. In other words they get paid on income data not outcome results.   They get paid without adding value and are not accountable for quality.

This Income Model is called Prospective Payment System and is being converted to an Institutional Academic Model.  It is created by the University researchers, designers of Obama Care’s implementation.

Misdirected they are plotting a payment plan under the auspices of the Accountable Care Act (Obama Care) and Accountable Care Organizations (ACO) that bundles complete services for post acute care (PAC) as a fixed contract with the providers taking all the risk.  By contracting with the continuum of care for the individual patient’s whole episode they speculate that they can save money and improve the integration of services.  The paradox is that the continuum currently doesn’t have standardized terminology nor systems to efficiently and effectively process the care let alone document the outcomes for measuring profits or loss.

As a model for payment you get what you pay for … using input triggers as the pricing model you get no continuum or coordination of services.  Change to pay for outcomes and you create an economic incentive to accomplish the moral incentive … better quality for less waste.  We must have an Enterprise Model replacing the Institutional Academic Model that is now being demonstrated under contracts with CMS.

Order my book “The Boomers Are Coming” on Amazon for the solution.  Jerry Rhoads jerry.l.rhoads@gmail.com