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Rewarding Efficient Care Delivery: Will Medicare Give it a Try?

Posted Sep 26 2008 5:17pm

by Ed Howe

Just yesterday, witnesses told the Senate Finance Committee: “Integrated healthcare delivery systems could help cut healthcare costs and improve quality, but Medicare and private payers are hampering the development of integrated systems because they do not reward the efficient delivery of care.”

Finally, there is some suggestion that how care is organized and delivered may be the key to healthcare reform!

Medicare, as the single largest payer of healthcare, could lead the way. Perhaps we should have a pilot project that seeks integrated delivery systems, which would opt-in for a bundled pricing plan. This would move us away from the historic a la cart pricing system that drives fragmentation and over-utilization of services.

What we have learned from the past is that private insurance companies can’t be part of such a pilot system. In the past, each time the insurance industry has participated in such reform efforts they have managed to subvert the process to cherry pick low-risk individuals and exclude those who would benefit the most from an integrated system of healthcare.

Now, I am not a fan of a single payer system. I would love to see the health insurance industry become competitive and insure risk rather than profit through maintaining status quo. For that to happen, we need success stories relative to integrated delivery. Let’s hope someone at CMS seizes that opportunity.

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