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  • Side Effects: Obamacare Could Punish Docs for Better Quality Care

    “Pay-for-performance” medicine has gained popularity in recent years, and Obamacare makes it a reality for Medicare enrollees.  But that’s not necessarily a good thing.

    Pay-for-performance allows third parties to pay physicians based on treatment outcomes.  In theory, this sounds like a great way to encourage doctors to improve outcomes.  But in practice, it’s a bit more complex.

    To determine payments, payers must use some sort of yardstick to measure outcomes.  Medicare has done this for years.  Its hospital and physician quality reporting programs require health care providers to report on government-chosen quality measures or face reduced reimbursement rates.

    Obamacare carries that a step further.  Under the new law, providers won’t just see reimbursement cuts for failing to report on quality measures—they’ll also face pay cuts if performance on those measures doesn’t satisfy standards to be set by the Secretary of Health and Human Services.  This opens up a whole new can of worms.

    In some cases, tying financial incentives to outcomes may produce positive effects.   Studies show that the jury is still out on its real effectiveness.  For the most part, value-based purchasing (pay-for-performance) seems to do little to improve patient health.  Indeed, financial incentives could actually punish physicians for doing the right thing.

    A recent study from Cleveland Clinic shows how this could happen.  The Clinic studied hospital readmission rates for patients with heart failure.  It is often considered a sign of poor quality care when a heart patient, once released from a hospital, must be readmitted for further treatment.  Turns out, this may not be the case at all.

    Writes Karen Pallarito for the HealthDay Reporter, the Clinic reasons that “[k]eeping more patients alive for a month in the first place means there are more patients eligible for readmission…They also suspect that assuring appropriate care for these patients, including any necessary procedures or surgery, may necessitate readmission to the hospital — which would drive up readmission rates.”

    The results of the study showed that high readmission rates actually corresponded to lower 30-day death rates.  The Cleveland Clinic’s 30-day readmission rate for heart failure was 28 percent, 3.3 points higher than the national average.  But their 30-day death rate of 8.8 percent was 2.4 points below the national average.

    Starting on Oct. 1, 2012, Medicare payments for hospitals with high readmission rates for certain conditions, including heart failure, will be reduced.  This means Obamacare may actually punish hospitals and physicians for providing better quality care.  As Dr. Eiran Z. Gorodeski of the Cleveland Clinic put it, “I think that the message to patients and the general public is that they should be wary of seemingly simple measures of quality of care.”

    There’s also a message here for lawmakers: health care is too large and complex to expect central planning to yield positive results.  Unfortunately, the passage of Obamacare and the recent recess appointment of Dr. Donald Berwick as Medicare head only move the U.S. further in that direction.

    Posted in Obamacare [slideshow_deploy]

    9 Responses to Side Effects: Obamacare Could Punish Docs for Better Quality Care

    1. juandos says:

      Side effects of ObamaCare?!?!

      Well consider this facet of nazi-like ObamaCare:

      HIT Standards 170.302

      The provisions of this subchapter implement section 3004 of the Public Health Service Act as shown in the federal registry

    2. West Texan says:

      Kathryn said " … health care is too large and complex to expect central planning to yield positive results."

      BINGO! We're a geographically large and spread out nation with varying population and community needs. This is why domestic services such as education and health care are states' business and not federal. Government closest to the people served is responsible for America's ingenuity and prosperity. The union was intended only to provide its members with a secure environment so as to promote the successful growth and welfare of states and their free market operations.

    3. Sadie says:

      Pay-for-Performance or lack thereof would be almost acceptable if it were also applied to Congress, i.e., a decrease in pension and health benefits.

    4. juandos says:

      ahhh, bite me whoever decided to not publish my earlier comment…

    5. Pingback: » Financial News Update – 07/16/2010 NoisyRoom.net: The Progressive Hunter

    6. grumpygresh says:

      Pay for performance will also lead to cherry picking depending on the outcome measure used. For example if HbA1C is used as a marker for good diabetic control and reimbursement is tied to this outcome, it will incentivize physicians and administrators to de-select difficult and non-compliant patients in order to maintain the excellent outcome measure. However, when one considers how enamored the statist health care planners are with rationing schemes such as the "complete lives system" it makes sense that sick and marginal patients should be excluded from receiving health care.

    7. Pingback: Obamacare Could Punish Docs for Better Quality Care «

    8. Pingback: The NHS Becomes More ‘American’ | Midnight Blue Says

    9. Dave Aldridge says:

      West Texan has it exactly correct in the idea that the "Union" is supposed to provide a secure environment, provide for the common defense, provide for domestic tranquility, or words to that effect. We the people need to elect folks who will do away with at least one third of the Federal Government. What's the joke about "500 lawyers on the bottom of the sea" a good start! This November we desperately need a "good start"!! Starting with the nutcake from Cal. "we need to pass it so we can see what's in it?'' How stupid can you get?

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