Fee-for-service payment is not the (main) problem.
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ABSTRACT: Objective
To understand the effect of physician payment incentives on the allocation of health care resources.Data sources/study setting
Review and analysis of the literature on physician payment incentives.Study design
Analysis of current physician payment incentives and several ways to modify those incentives to encourage increased efficiency.Principal findings
Fee-for-service payments can be incorporated into systems that encourage efficient pricing - prices that are close to the provider's marginal cost - by giving consumers information on provider-specific prices and a strong incentive to choose lower cost providers. However, efficient pricing of services ultimately will need to be supplemented by incentives for efficient production of health and functional status.Conclusions
The problem with current FFS payment is not paying a fee for each service, per se, but the way in which the fees are determined.
SUBMITTER: Dowd BE
PROVIDER: S-EPMC7375993 | biostudies-literature |
REPOSITORIES: biostudies-literature
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Project description:BackgroundHealthcare reforms in many countries have shown a movement from pure payment systems to mixed payment systems. However, there remains an insufficient understanding of how to design better mixed payment systems and how such systems, especially Diagnosis-Related-Group (DRG)-based systems, benefit patients. We therefore designed a controlled laboratory experiment to investigate the effects of fee-for-service (FFS), DRG, and mixed payment systems on physicians' service provision.MethodsA total of 210 medical students were recruited from Capital Medical University as subjects. They, in the role of physicians, were randomly divided into seven groups and chose the quantity of medical services for different patient types under pure FFS, pure DRG, or mixed payment schemes that included two FFS-based mixed payment schemes and three DRG-based mixed payment schemes. There were five rounds of each group of experiments, and each subject made 18 decisions per round. The quantity of medical services provided by subjects were collected. And relevant statistics were computed and analyzed by nonparametric tests and random effects model.ResultsThe results showed that the physicians' overprovision (underprovision) of services under FFS (DRG) schemes decreased under mixed payment schemes, resulting in higher benefit to patients under mixed payment schemes. Patients' health conditions also affected physicians' behavior but in different directions. Higher disease severity was associated with higher deviation of physicians' quantity choices from the optimal quantity under DRG and DRG-based mixed payment schemes, while the opposite was found for FFS and FFS-based mixed payment schemes.ConclusionsMixed payment systems are a better way to balance physicians' profit and patients' benefit. The design of mixed payment systems should be adjusted according to the patient's health conditions. When patients are in lower disease severity and resource consumption is relatively small, prospective payments or mixed systems based on prospective payments are more suitable. While for patients in higher disease severity, retrospective payments or mixed systems based predominantly on retrospective payments are better.
| S-EPMC9258053 | biostudies-literature
Project description:ImportancePrescription drug spending is a topic of increased interest to the public and policymakers. However, prior assessments have been limited by focusing on retail spending (Part D-covered drugs), omitting clinician-administered (Part B-covered) drug spending, or focusing on all fee-for-service Medicare beneficiaries, regardless of their enrollment into prescription drug coverage.ObjectiveTo estimate the proportion of health care spending contributed by prescription drugs and to assess spending for retail and clinician-administered prescriptions.Design, setting, and participantsDescriptive, serial, cross-sectional analysis of a 20% random sample of fee-for-service Medicare beneficiaries in the United States from 2008 to 2019 who were continuously enrolled in Parts A (hospital), B (medical), and D (prescription drug) benefits, and not in Medicare Advantage.ExposureCalendar year.Main outcomes and measuresNet spending on retail (Part D-covered) and clinician-administered (Part B-covered) prescription drugs; prescription drug spending (spending on Part B-covered and Part D-covered drugs) as a percentage of total per-capita health care spending. Measures were adjusted for inflation and for postsale rebates (for Part D-covered drugs).ResultsThere were 3 201 284 beneficiaries enrolled in Parts A, B, and D in 2008 and 4 502 718 in 2019. In 2019, beneficiaries had a mean (SD) age of 71.7 (12.0) years, documented sex was female for 57.7%, and 69.5% had no low-income subsidies. Total per-capita spending was $16 345 in 2008 and $20 117 in 2019. Comparing 2008 with 2019, per-capita Part A spending was $7106 (95% CI, $7084-$7128) vs $7120 (95% CI, $7098-$7141), Part B drug spending was $720 (95% CI, $713-$728) vs $1641 (95% CI, $1629-$1653), Part B nondrug spending was $5113 (95% CI, $5105-$5122) vs $6702 (95% CI, $6692-$6712), and Part D net spending was $3122 (95% CI, $3117-$3127) vs $3477 (95% CI, $3466-$3489). The proportion of total annual spending attributed to prescription drugs increased from 24.0% in 2008 to 27.2% in 2019, net of estimated rebates and discounts.Conclusions and relevanceIn 2019, spending on prescription drugs represented approximately 27% of total spending among fee-for-service Medicare beneficiaries enrolled in Part D, even after accounting for postsale rebates.
| S-EPMC9579917 | biostudies-literature
Project description:ObjectiveTo determine whether Medicare managed care penetration impacted the diffusion of endoscopy services (sigmoidoscopy, colonoscopy) among the fee-for-service (FFS) Medicare population during 2001-2006.MethodsWe model utilization rates for colonoscopy or sigmoidoscopy as impacted by both market supply and demand factors. We use spatial regression to perform ecological analysis of county-area utilization rates over two time intervals (2001-2003, 2004-2006) following Medicare benefits expansion in 2001 to cover colonoscopy for persons of average risk. We examine each technology in separate cross-sectional regressions estimated over early and later periods to assess differential effects on diffusion over time. We discuss selection factors in managed care markets and how failure to control perfectly for market selection might impact our managed care spillover estimates.ResultsAreas with worse socioeconomic conditions have lower utilization rates, especially for colonoscopy. Holding constant statistically the socioeconomic factors, we find that managed care spillover effects onto FFS Medicare utilization rates are negative for colonoscopy and positive for sigmoidoscopy. The spatial lag estimates are conservative and interpreted as a lower bound on true effects. Our findings suggest that managed care presence fostered persistence of the older technology during a time when it was rapidly being replaced by the newer technology.
| S-EPMC3227000 | biostudies-literature
Project description:IntroductionDementia is among the costliest of medical conditions, but it is not known how these costs vary by dementia subtype.MethodsThe effect of dementia diagnosis subtype on direct health care costs and utilization was estimated using 2015 California Medicare fee-for-service data. Potential drivers of increased costs in Lewy body dementia (LBD), in comparison to Alzheimer's disease, were tested.Results3,001,987 Medicare beneficiaries were identified, of which 8.2% had a dementia diagnosis. Unspecified dementia was the most common diagnostic category (59.6%), followed by Alzheimer's disease (23.2%). LBD was the costliest subtype to Medicare, on average, followed by vascular dementia. The higher costs in LBD were explained in part by falls, urinary incontinence or infection, depression, anxiety, dehydration, and delirium.DiscussionDementia subtype is an important predictor of health care costs. Earlier identification and targeted treatment might mitigate the costs associated with co-occurring conditions in LBD.
| S-EPMC7183386 | biostudies-literature
Project description:ObjectivesIn 2008, Florida's Medicaid program began reimbursing medical providers for preventive oral health services (POHS) delivered to children aged 6 months to 42 months. We examine whether Medicaid comprehensive managed care (CMC) and fee for service (FFS) had different rates of POHS during pediatric medical visits.Study designObservational study using claims data (2009-2012).MethodsUsing repeated cross-sections of 2009-2012 Florida Medicaid data for children 3.5 years or younger, we examined pediatric medical visits. We estimated a weighted logistic regression model to compare POHS rates among visits reimbursed by CMC and FFS Medicaid. The model controlled for FFS (vs CMC), years Florida had a policy allowing POHS in medical settings, an interaction between these 2 variables, and additional child- and county-level characteristics. Results are presented as regression-adjusted predictions.ResultsAmong 1,765,365 weighted well-child medical visits in Florida, POHS were included in 8.33% of CMC-reimbursed visits and 9.67% of FFS-reimbursed visits. Compared with FFS, CMC-reimbursed visits had a nonsignificant 1.29-percentage-point lower adjusted probability of including POHS (P = .25). When examining differences over time, although the POHS rate was 2.72 percentage points lower for CMC-reimbursed visits after 3 years of policy enactment (P = .03), rates were similar overall and increased over time.ConclusionsPOHS rates among pediatric medical visits in Florida were similar for visits paid via FFS and CMC, with low rates that increased modestly over time. Our findings are important because more children continue to be enrolled in Medicaid CMC.
| S-EPMC10100644 | biostudies-literature
Project description:BACKGROUND AND OBJECTIVES:Reimbursement for colonic pathology by the Centers for Medicare and Medicaid Services (CMS) are grouped in the Medicare Severity-Diagnosis Related Groups (MS-DRG). With limited available data, we sought to compare the relative impact of malignant vs benign colonic pathology on reimbursement under the MS-DRG system. METHODS:We used 5% national Medicare data from 2011 to 2014. Patients were classified as having benign disease or malignancy. Descriptive statistics and multivariate regression analysis were used to evaluate the surgical approach and health resource utilization. RESULTS:Of 10?928 patients, most were Non-Hispanic White women. The majority underwent open colectomy in both cohorts (P?<?.001). Colectomy for benign disease was associated with higher total charges (P?<?.001) and a longer length of stay (P?=?.0002). Despite higher charges, payments were not significantly different between the cohorts (P?=?.434). Both inpatient mortality and discharge to a rehab facility were higher in the oncologic group (P?<?.001). CONCLUSION:Payment methodology for colectomy under the CMS MS-DRG system does not appear to accurately reflect the episode cost of care. The data suggest that inpatient costs are not fully compensated. A transition to value-based payments with expanded episode duration will require a better understanding of unique costs before adoption.
| S-EPMC6635007 | biostudies-literature
Project description:ObjectiveTo evaluate and compare annual and biennial mammography screening rates across age, race, and geographic location (rural-urban) and to determine mammography screening persistence over 10 years among women enrolled in the West Virginia (WV) Medicaid Fee-for-Service (FFS) program.MethodsThe WV Medicaid FFS administrative claims data for women recipients aged 40-64 from 1999 to 2008 were used for study purposes. Annual and biennial screening rates and persistence with screening were determined for women who were continuously enrolled in the WV Medicaid FFS program for respective calendar years.ResultsA steady decline in the annual and biennial screening rates over a 10-year period (1999-2008) was observed among women recipients aged 40-64 years in the WV Medicaid FFS program, and screening persistence was also lower. Both annual and biennial screening rates and persistence varied by different demographic characteristics.ConclusionsAlthough mammography screening services are covered under Medicaid programs, underuse persists as a major concern. The results of this study emphasize the need to identify and address barriers to mammography screening in low-income rural populations.
| S-EPMC3411332 | biostudies-literature
Project description:Although administrative claims data can be used to identify high-need (HN) Medicare beneficiaries, persistence in HN status among beneficiaries and subsequent variation in outcomes are unknown. We use national-level claims data to classify Fee-for-Service (FFS) Medicare beneficiaries as HN annually among beneficiaries continuously enrolled between 2013 and 2015. To examine persistence of HN status over time, we categorize longitudinal patterns in HN status into being never, newly, transiently, and persistently HN and examine differences in patients' demographic characteristics and outcomes. Among survivors, 23% of beneficiaries were HN at any time-4% persistently HN, 13% transiently HN, and 6% newly HN. While beneficiaries who were persistently HN had higher mortality, utilization, and expenditures, classification as HN at any time was associated with poor outcomes. These findings demonstrate longitudinal variability of HN status among FFS beneficiaries and reveal the pervasiveness of poor outcomes associated with even transitory HN status over time.
| S-EPMC7375893 | biostudies-literature
Project description:ImportanceLow-value care, defined as care offering no net benefit in specific clinical scenarios, is associated with harmful outcomes in patients and wasteful spending. Despite a national education campaign and increasing attention on reducing health care waste, recent trends in low-value care delivery remain unknown.ObjectiveTo assess national trends in low-value care use and spending.Design, setting, and participantsIn this cross-sectional study, analyses of low-value care use and spending from 2014 to 2018 were conducted using 100% Medicare fee-for-service enrollment and claims data. Included individuals were aged 65 years or older and continuously enrolled in Medicare parts A, B, and D during each measurement year and the previous year. Data were analyzed from September 2019 through December 2020.ExposureBeing enrolled in fee-for-service Medicare for a period of time, in years.Main outcomes and measuresThe Milliman MedInsight Health Waste Calculator was used to assess 32 claims-based measures of low-value care associated with Choosing Wisely recommendations and other professional guidelines. The calculator designates services as wasteful, likely wasteful, or not wasteful based on an absence of indication of appropriate use in the claims history; calculator-designated wasteful services were defined as low-value care. Spending was calculated as claim-line level (ie, spending on the low-value service) and claim level (ie, spending on the low-value service plus associated services), adjusting for inflation.ResultsAmong 21 045 759 individuals with fee-for-service Medicare (mean [SD] age, 77.4 [7.9] years; 12 515 915 [59.5%] women), the percentage receiving any of 32 low-value services decreased from 36.3% (95% CI, 36.3%-36.4%) to 33.6% (95% CI, 33.6%-33.6%) from 2014 to 2018. Uses of low-value services per 1000 individuals decreased from 677.8 (95% CI, 676.2-679.5) to 632.7 (95% CI, 632.6-632.8) from 2014 to 2018. Three services comprised approximately two-thirds of uses among 32 low-value services per 1000 individuals: preoperative laboratory testing decreased from 213.8 (95% CI, 213.4-214.2) to 166.2 (95% CI, 166.2-166.2), while opioids for back pain increased from 154.4 (95% CI, 153.6-155.2) to 182.1 (95% CI, 182.1-182.1) and antibiotics for upper respiratory infections increased from 75.0 (95% CI, 75.0-75.1) to 82 (95% CI, 82.0-82.0). Spending per 1000 individuals on low-value care also decreased, from $52 765.5 (95% CI, $51 952.3-$53 578.6) to $46 921.7 (95% CI, $46 593.7-$47 249.7) at the claim-line level and from $160 070.4 (95% CI, $158 999.8-$161 141.0) to $144 741.1 (95% CI, $144 287.5-$145 194.7) at the claim level.Conclusions and relevanceThis cross-sectional study found that among individuals with fee-for-service Medicare receiving any of 32 measured services, low-value care use and spending decreased marginally from 2014 to 2018, despite a national education campaign in collaboration with clinician specialty societies and increased attention on low-value care. While most use of low-value care came from 3 services, 1 of these was opioid prescriptions, which increased over time despite the harms associated with their use. These findings may represent several opportunities to prevent patient harm and lower spending.
| S-EPMC7887655 | biostudies-literature
Project description:ObjectiveTo assess the extent to which all-cause 30-day readmission rate varies by Medicare program within the same hospitals.Study designWe used conditional logistic regression clustered by hospital and generalized estimating equations to compare the odds of unplanned all-cause 30-day readmission between Medicare Fee-for-Service (FFS) and Medicare Advantage (MA).Data collectionWisconsin Health Information Organization collects claims data from various payers including private insurance, Medicare, and Medicaid, twice a year.Principal findingsFor 62 of 66 hospitals, hospital-level readmission rates for MA were lower than those for Medicare FFS. The odds of 30-day readmission in MA were 0.92 times lower than Medicare FFS within the same hospital (odds ratio, 0.93; 95 percent confidence interval, 0.89-0.98). The adjusted overall readmission rates of Medicare FFS and MA were 14.9 percent and 11.9 percent, respectively.ConclusionThese findings provide additional evidence of potential variations in readmission risk by payer and support the need for improved monitoring systems in hospitals that incorporate payer-specific data. Further research is needed to delineate specific care delivery factors that contribute to differential readmission risk by payer source.
| S-EPMC7375992 | biostudies-literature