They write:
“Current policy initiatives may boost administrative costs. Pay-for-performance schemes add new documentation requirements and incentives for data mining of patients’ records to ferret out exceptions (for example, finding the phrase ‘patient refused test’ in free-text entries). Similarly, DRGs have long given hospitals incentives to find and document clinically insignificant comorbidities among inpatients, and the transition to accountable care organizations (ACOs) adds incentives to extend upcoding to outpatients. The ACO strategy also stimulates hospitals to develop bureaucratic structures to carry out tasks that resemble components of managed care, such as referral management, underwriting, and utilization review.” (emphasis mine)
So while pay-for-performance and ACOs could reduce healthcare costs (assuming we are able to keep patients healthier, reduce unnecessary tests and use more appropriate but lower costs sites of care, drugs, treatments, etc.), they actually increase administrative costs and red tape. I wonder if the creators of these new models considered that.
Have you launched and ACO or P4P contract and experienced higher administrative costs/requirements? Email Lindsey Dunn at ldunn@beckershealthcare.com to share your story.
