Payment Innovation in Emergency Care: A Case for Global Clinician Budgets

Abstract

The fee-for-service funding model for U.S. emergency department (ED) clinician groups is increasingly fragile. Traditional FFS payment systems offer no financial incentives to improve quality, address population health, or make value-based clinical decisions. FFS also does not support maintaining ED capacity to handle peak demand periods. In FFS, clinicians rely heavily on cross subsidization where high reimbursement from commercial payors offsets low reimbursement from government payors and the uninsured. While FFS survived decades of steady cuts in government reimbursement rates, it is increasingly strained due to visit volatility and the effects of the No Surprises Act, which is driving down commercial reimbursement. Financial pressures on ED clinician groups, combined with higher hospital boarding and clinical workloads are increasing workforce attrition. Here we propose an alternative model to address some of these fundamental issues: an all-payer-funded, voluntary global budget for ED clinician services. If designed and implemented effectively, the model could effectively support robust clinician staffing over the long-term, ensure stability in clinical workload, and potentially improve the equity in payments. The model could also be combined with population health programs (e.g., pre- and post-ED telehealth, frequent ED use programs, and other innovations) which offer significant payer returns and address both quality and value. A linked program could also change hospital incentives that contribute to boarding. Strategies exist to test and refine ED clinician global budgets through existing government programs in Maryland and potentially through state-level legislation, as a precursor to broader adoption.