Marching, but where? Moscow, I fear.

Melanie Evans and Bob Herman at Modern Healthcare report that "a new task force made up of providers, insurers and employers has committed to shift 75% of its members' business into contracts with incentives for health outcomes, quality and cost management by January 2020."What's up? Well, the theory is that risk-based payment mechanisms like "accountable care, bundled payments and other contracts with the potential for rewards or penalties based on quality performance and better cost control" will bring about greater efficiency and higher quality in the health care system.  It is argued that the current system, mainly based on fee-for-service schemes, leads to overtreatment and waste.In the midst of all the excitement, there are very few thoughtful observers who raise questions about the march.  I've devoted a lot of columns here to the unanswered questions and potential unintended consequences associated with risk contracts.  I've also been hard on the health care industry for a lack of analytical rigor when it comes to designing public policy prescriptions to deal with rising health care costs.  I don't want to go through all those arguments now, but let's just outline some as yet unanswered concerns:1) As risk is shifted from insurers to providers, what adjustment will be made in the insurers' cost of business, and how will those adjustments be passed along to consumers.  A reduction in risk should be accompanied by a reduction in capital reserv...
Source: Running a hospital - Category: Health Managers Source Type: blogs