Realigning incentives in fee-for-service medicare

Health Affairs

Volumn 22, Issue 4, 2003, Pages 59-70

  Wallack, Stanley S ^a   Tompkins, Christopher P ^a  

^a BRANDEIS UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

AGED; ARTICLE; ECONOMICS; HEALTH CARE POLICY; HUMAN; LEGAL ASPECT; MEDICAL FEE; MEDICARE; ORGANIZATION AND MANAGEMENT; REIMBURSEMENT; RISK; STATISTICAL MODEL; UNITED STATES;

AGED; FEE-FOR-SERVICE PLANS; HEALTH CARE REFORM; HUMANS; MEDICARE PART B; MODELS, ECONOMIC; REIMBURSEMENT, INCENTIVE; RISK; UNITED STATES;

EID: 0042161764     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.22.4.59     Document Type: Review

References (19)

1. Any broad Medicare payment reform should try to achieve at least two related objectives: mainstreaming Medicare beneficiaries into the types of products available for employed populations, and achieving efficient, appropriate and coordinated care. Managed FFS, preferred provider organizations (PPOs), and point-of-service (POS) plans have been widely adopted by the private sector, in addition to and even in place of, health maintenance organizations (HMOs). This means that Medicare's objective of having beneficiaries served in "mainstream" situations can include a wider range of options, including managed, open-network environments. The prevalence in the market of a variety of managed care choices reflects the fact that more efficient use of hospitals and other high-cost technologies is not contingent on their being provided by a highly integrated, tightly managed, or closed-panel environment. Contractual models between payers and providers with performance incentives are very common today.
2. J.C. Robinson, "Theory and Practice in the Design of Physician Payment Incentives," Milbank Quarterly 79, no. 2 (2001): 149-178.
3. Institute of Medicine, Crossing the Quality Chasm: A New Health System for the Twenty-first Century (Washington: National Academies Press, 2001).
4. Robinson, "Theory and Practice."
5. M. Glavin et al., "An Examination of Factors in the Withdrawal of Managed Care Plans from the Medicare+Choice Program," Inquiry (Winter 2002/2003): 341-354.
6. Omnibus Budget Reconciliation Act (OBRA) of 1990, P.L. 101-239.
7. Medicare Payment Advisory Commission, Report to Congress: Medicare Payment Policy, Vol. 2 (Washington: MedPAC, March 1998), 95-97. The major problem with the MVPS was that it set targets for spending growth that were not sustainable. The targets were based on average volume growth, which had dropped from 8 percent in 1992 to 3 percent in 1996. This drop, coupled with legislated reductions in the targets that were intended to slow the rate of spending growth, led to targets that were too low. Congress recognized this problem and, as part of the Balanced Budget Act of 1997, replaced the MVPS with the sustainable growth rate system.
8. Federal Register (27 September 2002): 61116-61129.
9. Robinson, "Theory and Practice."
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11. Robinson, "Theory and Practice."
12. J. Feder, J. Hadley, and S. Zuckerman, "How Did Medicare's Prospective Payment System Affect Hospitals?" New England Journal of Medicine 317, no. 14 (1987): 867-873.
13. Because Medicare sets all fees administratively, summary measures of reimbursements per patient are equivalent to the volume and intensity of services.
14. J.P. Weiner et al., "Development and Application of a Population-Oriented Measure of Ambulatory Care Case-Mix," Medical Care 29, no. 5 (1991): 452-472;
15. and J.P. Weiner et al., "Risk-Adjusted Medicare Capitation Rates using Ambulatory and Inpatient Diagnoses," Health Care Financing Review (Spring 1996): 77-99.
16. Robinson and Casalino, "Vertically Integrated and Organizational Networks."
17. G. Pope et al., Technical Summary and Review of Demonstration Design for Group-Specific Volume Performance Standards, Report to HCFA (Waltham, Mass.: Health Economics Research, 1997).
18. M.C. Tompkins et al., "Bringing Managed Care Incentives to Medicare's Fee-for-Service Sector," Health Care Financing Review (Summer 1996): 43-63.
19. F. Porell et al., An Analysis of Group-Specific Medicare Volume Performance Standards, Final Report to HCFA (Waltham, Mass.: Institute for Health Policy, Heller School, Brandeis University, July 1991).