Today's payment models discourage quality improvement in healthcare and drive up costs for everyone, according to an analysis by David Bailey, MD, MBA, president and CEO of Jacksonville, Fla.-based Nemours Children's Health System published in The Washington Post.
Dr. Bailey also expressed frustration in how the healthcare system's structure makes it so his role as a physician and his role as a health system C-suite executive don't align as nicely as one might assume they would.
For instance, Nemours piloted a community-based prevention program for children's asthma that has reduced emergency department visits and hospitalizations. Unfortunately for Nemours, whose reimbursement rates come mostly from fee-for-service, the system can't really afford the reduction of ED and hospital revenue that the success of the asthma program has caused.
With this dilemma in mind, Dr. Bailey reflected on some of the issues facing hospitals and health systems today in a fee-for-service environment. Listed below are six takeaways from Dr. Bailey's analysis:
1. The new goals of healthcare include increasing access, enhancing care quality and improving population health while controlling costs and bettering value.
2. In the primarily fee-for-service environment, where payments are dictated by volume as opposed to quality or efficiency, these new care models are unsustainable.
3. The fee-for-service payment model doesn't register the potential that investments in preventative care can have on improving health and reducing costs over the long-term.
4. A value-based payment model would support community-based investments that keep children and adults healthy and out of the ED.
5. Payment reform would mean Nemours, as well as many other hospitals and health systems, could commit to focusing on the quality of services as opposed to quantity in a way that is financially responsible.
6. If funders assist in sustaining effective models, providers and payers can work together to create long-term solutions to align their goals toward sustainability.