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| Dr. William Matzner, Simi Valley, California |
The cost of healthcare continues to be a topic of intense discussion from kitchen tables, to board rooms, to congressional hearings. Spurred by conversations and allegations, insurance companies and entities such as Medicare and Medicaid have striven to conceive alternate payment approaches besides the traditional fee for service methods on the basis of reducing costs.
Capitation
(a system in which providers are given a defined sum per patient regardless of
how many services are rendered in a defined period of time) has been around for
many years and has been fraught with complaints among providers for
inconsistencies between responsibility for and authority over patient
interactions. The HMO model has also been attempted in various iterations with
its focus on preventive care, but most have not survived, Kaiser Permanente
being an exception. Medicare has since developed a method falling between that
of full capitation and fee for service—the use of bundled payments or put more
descriptively, episode-based payments. In this method, reimbursement of
healthcare providers (both hospitals and physicians) is based on the expected
costs for clinically defined episodes of care. Since 1984, bundling payment
methods have been tried and as of 2012 almost one third of medical
reimbursement is now from a bundling system.
In 2018, Medicare introduced a variation called Bundled
Payment for Care Improvement Advanced (BPCI Advanced). In this model there are 48 episodes, 45
inpatient and three outpatient. Again there are four payment models, with model
two being the most common. Several of
the medical episodes included in BPCI Advanced include CHF, COPD, Sepsis, Acute
MI and Pneumonia. As every physician would know, there is a wide variation in
the degree of illness and the course of therapy within these diagnoses, and
there is nothing uniform about each case.
For example, Sepsis includes three DRGs which range from
uncomplicated to septic shock. Unlike
elective surgery, providers cannot screen these patients to avoid
complications, and in fact many of these patients develop complications and/or
have significant comorbidities. All of
these variables create significant variations of length in stay (LOS) and other
costs associated with each hospitalization. In these cases, where there is a
wide variation in costs, a need exists to employ a method to better predict
these costs.
That methods exists but seems too seldom used. It is decision
tree modeling that offers both the flexibility and complexity of interaction to
more accurately predict costs than just a linear model which is commonly
used. Since diseases such as sepsis,
COPD and CHF can become a complex affair with many possible outcomes that would
affect costs, this type of modeling lends itself to such an analysis. Armed
with better predictability results, providers are better able to defend both
real costs and to negotiate for more fairly applied payment schemes.
If your objective is to provide the best decision-making
for your organization and take a global view of your business, expanding your
sights beyond ROI, and educating other decision-makers, Cost Effectiveness
Analysis can make your organization more competitive and more profitable.
William Matzner, MD. is a recognized expert in Healthcare
and Neuro Economics. With a Ph.D. in Economics, MBA and Medical Doctor degree,
Dr. William Matzner will provide you with expert analysis on health and
wellness programming, populations health management, disease management, new
program development, facility development, equipment acquisitions, and other
healthcare programs, acquisitions and initiatives. For more information about
cost effectiveness analysis and improved financial accountability for your
organization, visit Dr. Matzner at http://healthcareanalytics.biz. Dr.
Matzner is also available for speaking engagements, retreat presentations and
topic specific addresses.
Website:
https://drwilliammatzner.com
Consulting
Website: https://healthcareanalytics.biz
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William Matzner, MD (Simi Valley, California), has been practicing medicine since 1989, Internal Medicine and Reproductive Immunology. M.D. with Honors from Baylor College of Medicine.
