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Medicare Lays Out P4P Plans

by John Moore | November 27, 2007

Yesterday, Medicare released its 104 page proposal for moving to a partial pay for performance (P4P) model.  The Wall Street Journal Health Blog has a direct link to the proposal in their posting.  As the WSJ points out, what is unique here is that Medicare is proposing to withhold a certain percentage of reimbursement across the board then reward those who perform well with a rebate of sorts.  Sounds good in theory but with most hospitals getting a significant portion of funding from Medicare in the first place and secondly most are operating on razor thin margins, it’s difficult to see how this will actually pass Congressional review.

But what is most disturbing is that this proposal from Medicare does not look to really change how healthcare is delivered.  Rather, this proposal more or less maintains the status quo delivery model, one that is notably flawed  and inefficient.  Would not it be a wiser choice by Medicare to propose trials of new care delivery models with potential for broad roll-out once their efficacy was demonstrated.  As mentioned previously on this site, telehealth is one such delivery model that has enormous potential for dramatically reducing costs of care while concurrently contributing to better outcomes.

So, instead of creating a 100-plus, page proposals such as this for Congress on something that may never see the light of day, why not focus energies in areas where there is some real potential for change?

One response to “Medicare Lays Out P4P Plans”

  1. Keith Risman says:

    Ok, silly proposal. Take the hospitals with the poorest outcomes and provide them with fewer dollars with which to improve those outcomes. If they want to spend more to improve delivery and about the time they get plans in place their funding is reduced, then any delivery improvement will not be accomplished. The net result in poorly performing hospitals kill more patients.

    I suspect that someone at medicare figured that out. Dead patients cost less. Perhaps that is extreme, but the above is not a good idea for bringing positve change.

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