Healthcare Payment Reform. – MJP Healthcare Innovations

Healthcare Payment Reform.

Healthcare Payment Reform

Piecemeal solutions to address problems created by fragmentation of healthcare services and dysfunctional financial incentives have had unfortunate unintended consequences. Policy-driven efforts have mapped integrated, comprehensive approaches to payment reform failed to provide an analytic infrastructure for effective implementation. Clinically-driven efforts have yielded a plethora of detailed evidence-based practice guidelines. While these may serve as standards for good clinical care, they fail to address the many judgmental questions that arise in actual clinical practice or important issues of technical competence, and do not provide a useful framework for empirical analyses of risk-adjusted harms and benefits to patients. Analytically-driven efforts have produced sophisticated tools to evaluate risk-adjusted outcomes of care in defined areas of clinical practice. However, their application currently requires an unacceptable over-simplification of medical care. Consequently, despite their usefulness in evaluating comparative clinical performance, these analytic methods lack sufficient clinical nuance to direct the systematic distribution of healthcare resources.

To overcome these deficiencies, MJP’s component-based healthcare episode infrastructure (patent pending) groups discrete episodes of care into seven mutually-exclusive types, according to the nature of the care provided. Related episodes are grouped into families of mutually-exclusive episodes structured to capture important events and decisions and to demonstrate their effect on resource consumption and patients’ wellbeing. The judicious use of transfer prices insulates payers from excessive rates of expensive complications and inappropriate costly services. In addition, the ranked assignment of services among concurrent episodes fosters coordinated care.

This nuanced design of episodes offers financial incentives for providing coordinated, cost-effective health care that encompasses:

judicious use of diagnostic procedures,
financial consequences for clinical harms that require additional services and new episodes,
achievement of clinical benefits
adherence to demonstrably best clinical practices
technical proficiency and clinical judgment in managing individual episodes, and
coordination of care among coexisting episodes

Early studies suggest that transition to an efficient healthcare market utilizing MJP’s component-based healthcare episode infrastructure would reduce total healthcare costs by 10 to 15 percent without compromising (and possibly improving) quality of care. As providers compete on quality and cost, further benefits are likely to accrue.