All-payer System Research Articles

Medicare Reimbursement Rates: Too Much or Too Little? What Are Our Options?

In recent decades, Medicare reimbursement rates have continued to fall behind general inflation rates while the number of beneficiaries has continued to rise. To compensate for lagging Medicare and Medicaid rates, cost shifts have increased the financial burden on private payers and patients. With impending increases in inflation caused by current historical events, reform is necessary. Otherwise, increasing number of physicians will likely be forced to limit the number of Medicare patients in their practices. However, the 2022 annual March Report released by MedPAC continued to recommend that Congress freeze physician payments in 2023. Various policy solutions have been considered, including single-payer systems, all-payer systems, and public options. Examples of such systems exist in specific states, including Maryland, Washington, and Colorado, and can provide insight on how these policies might fare if applied to the entire country. Overall, Medicare needs reform involving a stronger focus on a pay-for-value approach.

Rural Health Inequity and the Air Ambulance Abyss: Time to Try a Coordinated, All-Payer System

Rural Health Inequity and the Air Ambulance Abyss: Time to Try a Coordinated, All-Payer System

Bending the Cost Growth Curve and Expanding Coverage: Lessons from Germany's All-Payer System A Tribute to Uwe Reinhardt.

The Milbank QuarterlyVolume 98, Issue 2 p. 279-296 Perspective Bending the Cost Growth Curve and Expanding Coverage: Lessons from Germany's All-Payer System A Tribute to Uwe Reinhardt TSUNG-MEI CHENG, Corresponding Author TSUNG-MEI CHENG [email protected] Address Correspondence To: Tsung-Mei Cheng, Woodrow Wilson School of Public and International Affairs, Princeton University, Robertson Hall, Princeton, NJ 08544-1013 (email: [email protected]).Search for more papers by this author TSUNG-MEI CHENG, Corresponding Author TSUNG-MEI CHENG [email protected] Address Correspondence To: Tsung-Mei Cheng, Woodrow Wilson School of Public and International Affairs, Princeton University, Robertson Hall, Princeton, NJ 08544-1013 (email: [email protected]).Search for more papers by this author First published: 28 February 2020 https://doi.org/10.1111/1468-0009.12453Read the full textAboutPDF ToolsExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Volume98, Issue2June 2020Pages 279-296 RelatedInformation

Financial Overview of an LVAD Program under Global Bundled Payment Model

Purpose LVADs decrease mortality but have high hospitalization costs. Maryland operates the nation's only global bundled payment (GBP) model with an all-payer system where insurers reimburse at similar rates. The financial impact on LVAD volume is unclear. We hypothesized that the GBP model would not financially limit LVAD program growth. Method We performed a retrospective review of LVAD patients at a single center. We analyzed direct variable charges relative to patients’ characteristics and lengths of stay (LOS). Charges were those incurred from index LVAD implant admission and readmissions. Results Between 12/15 and 8/17, 50 patients had LVAD implants, 45 had available data. Median age was 56 years, median support 150 days (IQ 92-275), and 77.4% had less than a college education. By 8/17, 26 (57.8%) remained on LVAD support, 13 (28.9%) were transplanted, and 5 died (11%). Most had government insurance that paid at 93% of charges (Figure A) with a payment:cost ratio > 1. Total charges are $17,753,728. LOS from implant to discharge was 16 days (IQ 12-28). Median charge of LVAD implant admission was $322,058. For each extra hospital day, charge increased by $5585 (R2 = 0.7348, p Conclusion The GBP model may not limit LVAD program growth given payment:cost ratio > 1 by non-commercial insurance. LVAD implant in less sick patients and reduced readmissions likely result in net positive income for a program under the GBP model.

Maryland's All-Payer Health Care System

The state of Maryland, in collaboration with the Centers for Medicare & Medicaid Services, developed the first all-payer system model in the Unites States in 1971 and 35 years later in response to financial pressures undertook to modernize this program. The focus of the modernized program was to improve overall per-capita expenditure, quality of care, and the outcome of Marylanders' health. The financial status of Maryland hospitals was declining because of the rate setting of the Health Services Cost Review Commission while hospital admission rates and spending were increasing. This study showed positive change in moving Maryland health care delivery model in hospitals from volume-driven care to value-driven coordinated care. Maryland hospitals have changed their mind-sets to achieve the Triple Aim of cost reduction, health improvement, and quality-of-care improvement. The modernized model does require hospitals and business individuals to change their approach to be accountable in providing health care to all citizens, as well as trying to solve chronic social problems such as poverty and unequal access to health care.

Envisioning a Future Governance and Funding System for Undergraduate and Graduate Medical Education.

Funding for graduate medical education (GME) and undergraduate medical education (UME) in the United States is being debated and challenged at the national and state levels as policy makers and educators question whether the multibillion dollar investment in medical education is succeeding in meeting the nation's health care needs. To address these concerns, the authors propose a novel all-payer system for GME and UME funding that equitably distributes medical education costs among all stakeholders, including those who benefit most from medical education. Through a "Medical Education Workforce (MEW) trust fund," indirect and direct GME dollars would be replaced with a funds-flow mechanism using fees paid for services by all payers (Medicaid, Medicare, private insurers, others) while providing direct compensation to physicians and institutions that actively engage medical learners in providing clinical care. The accountability of those receiving MEW funds would be improved by linking their funding levels to their ability to meet predetermined institutional, program, faculty, and learner benchmarks. Additionally, the MEW fund would cover learners' UME tuition, potentially eliminating their UME debt, in return for their provision of health care services (after completing GME training) in an underserved area or specialty. This proposed model attempts to increase transparency and enhance accountability in medical education by linking funding to the development of a physician workforce that is able to excel in the evolving health delivery system. Achieving this vision requires physician educators, leaders of academic health centers, policy makers, insurers, and patients to muster the courage to embrace transformational change.

The Road Ahead

The Road Ahead

All-Payer State Systems

All-Payer State Systems

The Many Different Prices Paid To Providers And The Flawed Theory Of Cost Shifting: Is It Time For A More Rational All-Payer System?

In developed nations that rely on multiple, competing health insurers-for example, Switzerland and Germany-the prices for health care services and products are subject to uniform price schedules that are either set by government or negotiated on a regional basis between associations of health insurers and associations of providers of health care. In the United States, some states-notably Maryland-have used such all-payer systems for hospitals only. Elsewhere in the United States, prices are negotiated between individual payers and providers. This situation has resulted in an opaque system in which payers with market power force weaker payers to cover disproportionate shares of providers' fixed costs-a phenomenon sometimes termed cost shifting-or providers simply succeed in charging higher prices when they can. In this article I propose that this price-discriminatory system be replaced over time by an all-payer system as a means to better control costs and ensure equitable payment.

Paying by the Rules: How Eliminating the Cost Shift Could Improve the Chances for Successful Health Care Reform

In the 1970s and 1980s, a number of states adopted all-payer rate-setting systems as strategies to control the rate of increase in health care costs. These systems brought stakeholders to the table to negotiate the allocation of costs associated with caring for the uninsured and created, briefly, an opportunity for states to address access problems more broadly with the participation of major stakeholders. This article uses a case study of Maine and comparisons with other states to argue that the payment disparities between public and private payers that have grown over time since the demise of all-payer systems constitute a significant barrier to successful health reform.

An Information Prescription For Health Care’s Cognitive-Disorder Problems

Perhaps not surprisingly, the two busi-ness school professors find that the structureand strategy for health care competition needto be fixed, and the primary problems involvemanagement and organization, not technologyor regulation. The authors’ basic thesis shouldbe no surprise to current and aspiring MBAs,or even casual skimmers of pop-business-strategy books: It makes more sense to setgoals and measure results than to specifymethods and try to enforce them.Once you understand the book’s basic defi-nitions and mantras and then apply some com -mon sense from the rest of the real world, you,too,mightposeasan“instapunditofhealthcare strategery.” Value represents the desiredcombination of health outcome per dollar ofcost expended. It should ultimately reflect thepreferences of customers (patients), and it isbest measured at the level of medical condi-tions over the full cycle of care (rather than fordiscrete medical care interventions).The core strength of this book is that it pro -vides an overarching guidepost and vision todirect the otherwise fragmented players andcomponents of the overall health care system.The key to improving results might involvemore information; it certainly will requirebetter information. Porter and Teisberg make apersuasive case in this regard, but their wide-ranging exploration of a host of strategies andtechniques for improving the status quo be -comes so ambitious that a clearer, practicalpath to near-term implementation remainshard to discern. They touch too briefly on thepotential for making existing sources of healthcare data, in Medicare and state all-payer sys-tems, more available and useful. They also in-sist on an all-inclusive, Securities and Ex-change Commission (SEC)–style, centralizedcommon pool information regime, whereas (atleast for transaction price information) a fu-tures-market model in which proprietary in-formation assets are owned by a trading venuemight produce data streams at lower pricesand with greater transparency than throughthe SEC model.

Single-payer and all-payer systems: Implications for emergency medicine in the United States

[Williams RM. Single-payer and all-payer systems: implications for emergency medicine in the United States. Ann Emerg Med. March 2001;37:337-339.]

Impact of an all-inclusive diagnosis-related group payment system on inpatient utilization.

Although case-based payment is one of the main reimbursement mechanisms for hospitals, little is known about its effects in the general population. Prior studies have focused on Medicare or on all-payer systems in particular states. This study estimates the effect of a prospective payment system based on diagnosis-related groups (DRGs) nationwide in the Department of Veterans Affairs. Multiple regression analysis was used to estimate the effect of Department of Veterans Affairs's diagnosis-related group system separately for 22 diagnoses. The dependent variables were length of stay, inpatient days per patient, and discharges per patient. Covariates included patient, hospital, and area characteristics. Department of Veterans Affairs's diagnosis-related group system reduced lengths of stay and inpatient days per patient. The largest impacts were for the psychiatric diagnoses and several surgical procedures. The magnitudes of the effects were generally moderate. Department of Veterans Affairs's case-based system had a negligible effect on discharges per patient. Per case reimbursement is a potentially useful tool for improving the efficiency of inpatient care for all types of diagnoses and age groups. The effect may be larger than estimated here because of institutional barriers and caps on financial impact.

Impact of an all-inclusive diagnosis-related group payment system on inpatient utilization

OBJECTIVES. Although case-based payment is one of the main reimbursement mechanisms for hospitals, little is known about its effects in the general population. Prior studies have focused on Medicare or on all-payer systems in particular states. This study estimates the effect of a prospective payment system based on diagnosis-related groups (DRGs) nationwide in the Department of Veterans Affairs. METHODS. Multiple regression analysis was used to estimate the effect of Department of Veterans Affairs's diagnosis-related group system separately for 22 diagnoses. The dependent variables were length of stay, inpatient days per patient, and discharges per patient. Covariates included patient, hospital, and area characteristics. RESULTS. Department of Veterans Affairs's

Finding the silver lining without the golden eggs.

Despite the failure of Congress to enact comprehensive health care reform legislation, including the hard-won proposals on behalf of academic medicine, there is much reason for hope for the future. Academic medicine won major victories in having its proposals for a broad-based all-payer system of explicit supports for its various missions included in major reform bills. If the members of the academic medicine community can strengthen further the unity they achieved during the long debate, they will be well positioned to succeed if another opportunity arises in time to rescue academic medicine from a buyer's market that is indifferent to their needs. But prudence dictates that they not depend on being rescued and instead consider the faltering of legislative reform as a wake-up call, summoning them to focus on difficult issues within their own control as they engage the rapidly changing health-care marketplace. Academic medicine has grown phenomenally over the past few decades because its missions have been strongly supported by the public. Continued growth is unlikely, given society's numerous unmet needs and limited resources. Therefore, academic medicine not only must face squarely the challenge of restructuring its work to be more efficient and more productive, but must use the many opportunities that lie ahead to sustain and strengthen its public support by embracing public accountability and rededicating its efforts to meet public expectations.(ABSTRACT TRUNCATED AT 250 WORDS)

Academic Medicine

The 103rd Congress resisted the best opportunity this country has yet had to restructure its health care delivery system and establish universal coverage for basic health care services for all Americans. The stakes were high in the debate, particularly for academic medicine. We strongly endorsed universal coverage for a number of reasons. Universal access to health insurance would alleviate our institutions' uncompensated care burden. Moreover, a system of universal coverage would provide a structure on which to secure permanent federal support (eg, an all-payer surcharge) for our missions to educate the nation's physicians, provide high-quality care to the sickest patients, and conduct biomedical and behavioral research to prevent disease and improve the quality of life. Academic medicine must continue its fight for a broad-based, all-payer system that explicitly supports graduate medical education, teaching hospitals, medical schools, biomedical and behavioral research, and advanced nursing education. Currently, academic missions are being financed

The United States Needs a Health System Like Other Countries

To the Editor. —Dr Glaser 1 believes that market-based approaches to health care reform will not succeed and, therefore, that the United States should adopt an all-payer, payroll-tax-financed health system. However, he fails to note many of the drawbacks and limitations of this proposal. First, as with all payroll taxes, his plan is fundamentally regressive and thus, to many, unfair. Enacting a new payroll tax to finance health care would result in both high and low wage earners' paying the same tax rates for health care. Second, higher payroll taxes will force the price of labor up. Employers will have to absorb some of these new costs, but most of them will be passed on to employees. As a result, adopting an all-payer system will lead to higher levels of unemployment, to more business failures, and to reductions in wages. Some econometric models predict that adopting a modest 7% payroll

How Expenditure Caps and Expenditure Targets Really Work

Every organized payment system must contain its costs in order to keep within revenue without denying benefits. Fixed expenditure caps requiring the provider to operate within its annual financial grant can be imposed on organizations like hospitals, but are fiercely resisted by the medical profession. All financial arrangements with doctors are negotiated, including systems of fixed expenditure caps and more flexible expenditure targets. If the doctors accept the principle of caps and cooperate in achieving them, they do so only as part of a negotiated settlement to avoid a worse outcome. Government's power is minimized, even when government is the payer. Caps on the physicians' sector are unusual. Instead, we see the spread of flexible targeting systems, wherein cost overruns are compensated for by lower expenditure targets the following year. Medical associations in all countries resisted even these restraints for years, but eventually accepted them, provided that target setting, judgments of overruns, utilization control, and all other features are part of a joint negotiating system. Targeting systems are often complicated because they preserve the semiprivate character of statutory health insurance and they are the result of negotiated compromises. To succeed in controlling costs, they require the cooperation of the medical association and of the rank-and-file doctors--but they can succeed. The United States has enacted a small-scale targeting system for Medicare physician payments alone. It cannot become the method for universal health insurance, which must heed lessons from abroad. Only an all-payer system can cover an entire population and contain the costs of the system. A few government officials cannot dictate and implement expenditure goals, but a system of consultation is required for setting and carrying out targets. Impartial officials can regulate hospitals according to the guidelines produced by the consultations, but the record of the medical profession in the countries reviewed here is that they insist on negotiating the final rules and rates. Americans have become bewitched by the mirage of econometric formulas automatically governing a sector, but the real problem is to devise and operate a harmonious decision-making system.

Health USA. A national health program for the United States

The Health USA Act of 1991 addresses two fundamental health services financing problems: the more than 30 million uninsured persons and the rising costs for health care and for health insurance. Health USA would provide coverage of the entire resident population for comprehensive medical and preventive health and long-term care services through a universal tax-funded financing system. The federal government would contribute an average of 87% of program costs to each state, which would establish, under federal guidelines, a state health program. Each individual or family may enroll in any health plan approved by the state program, including many private plans, or a plan run by the state program. Through the approved plan of their choice, enrollees would receive covered services and obtain their care from participating physicians and other professional practitioners, hospitals, and other facilities. The state program would pay approved plans a capitation payment for every person enrolled. The plans would pay professional providers fees, as part of an all-payer system of fee schedules and expenditure targets, or capitation payments or salary. Hospitals would be financed through global budgets negotiated by the state program with each hospital. The plan run by the state program would pay the health care costs of any person who does not enroll in an approved plan, making the state plan the payer of last resort and eliminating uncompensated care and cost shifting by providers. Health USA would separate health care coverage from employment, ensuring uninterrupted coverage and eliminating employers' administrative role in providing coverage. Federal and state taxes would replace present methods of financing by private insurance premiums and large out-of-pocket expenditures. Building on the present system of health plans, Health USA would offer all persons a wide choice of competing plans in which to enroll and offer professional providers a wide choice of plans in which to practice. It would control costs by increasing financial accountability of providers and health plans, reducing present reliance on intrusive utilization review and on patient cost sharing. By controlling health care and administrative costs, Health USA would cover the entire population and, according to independent cost estimates, reduce national health expenditures by $11.5 billion in 1991.

DRGs and the “Negative” trauma workup

We conducted a study to assess the financial impact of the diagnostic workup and care of 136 trauma patients admitted to our institution during a six-month period who were subsequently found to have only minor injuries (Injury Severity Score less than or equal to 9, Abbreviated Injury Score less than 3). The New Jersey DRG reimbursement system, an all-payer system, failed to provide adequate financial compensation overall, as the average loss per patient (operating cost minus reimbursement) was $508. Lost potential revenue (hospital charges minus reimbursement) was even greater, averaging $1,834 per patient. We conclude that the New Jersey DRG reimbursement system, in its current form, provides inadequate reimbursement for the system, in its current form, provides inadequate reimbursement for the proper workup and treatment of trauma patients with minor injuries. Because these patients are those most likely to help "subsidize" the care of sicker patients, changes in the system are necessary to allow hospitals to continue to provide state-of-the-art trauma care and to continue to minimize the number of preventable deaths due to trauma.