The unintended consequence of physician payment reform: Reduced home-dialysis

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Medicare physician payment reform discourages the use of home dialysis, according to a paper coauthored by researchers at Rice University's Baker Institute for Public Policy in Houston, Stanford (Calif.) University and Baylor College of Medicine in Houston.

The paper, published by the American Journal of Managed Care, concludes that 2004 Medicare reforms that transitioned in-center hemodialysis care payments from a capitated to a tiered fee-for-service model may have discouraged use of home dialysis — which is more flexible and convenient for patients — by making in-center options more lucrative for physicians.

To come to this conclusion, the authors compared patients with traditional Medicare to those with Medicare Advantage, which was not affected by the policy. They also examined patient proximity to large dialysis facilities, because larger facilities offer an opportunity for physicians to increase in-center dialysis revenues for a lower cost.

They found those most affected by the policy change were patients living near large dialysis facilities. Those patients experienced a 0.9 percent reduction in absolute probability of home dialysis after the payment reforms, compared to patients in areas with smaller facilities.

"These findings highlight both an area of policy failure and the importance of considering unintended consequences of future efforts to reform physician payment," the authors wrote.


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