themaddone

A lot of the industry talk, particularly around Medicaid and Medicare, revolves around payment and service delivery reform. Things like pay-for-performance, bundled payments, all the way to the implementation of the ACOs, and other similar types of innovations. All of them are generally trying to move away from a strict fee-for-service payment system.

So: Do you think any of them will actually be successful in driving down long term trends, or actually producing absolute savings to the system? Or is it all just sound and fury?

Thanks for doing this, I really enjoy your perspectives.

That's a great sentiment, but there a number of serious problems:

1. What hospitals charge is nowhere near their actual cost.
2. Figuring out what the actual cost is is actually really hard, and takes a lot of time. Cost reports take years to process.
3. Even if you could do that, from where we are now, that's massive increase in both federal and state spending. Legislators - and taxpayers - simply won't support it.

So what to do? I have no idea.

But it would increase government expenditures. What you're really talking about, operationally, is an expansion of Medicaid to cover more people (even if it is only for hospital costs). And if you're going to do that, shouldn't you cover primary care too, since that's cheaper and could prevent unnecessary hospital visits?

Bonus: Hospitals will tell you that neither Medicare nor Medicaid rates actually cover their costs.

I agree with you that it's all kind of indeterminate and experimental - but I'm kind of interested in your opinion. Are there innovations out there that you feel have a lot of potential? If you had to bet on it, what would you wager on?

Or is it all so murky that nothing stands out as something that might really be effective?

Thanks again, I appreciate your thoughtful replies all over this thread!