A Value Added Proposition

This past Sunday morning, while at home reading the Palm Beach Post, an article immediately caught my attention. The piece, How Medicare Penalizes Hospitals for Being Too Careful, was a reprint of an article that had appeared in the New York Times earlier in the week. I suddenly wondered; “could hospitals actually be penalized for being too safe?”

As I read the article, I quickly realized that the title was a play on words and even though a few hospitals referenced in the piece believe they are being penalized for doing the right thing, there is much more to this story. The reality is that as the health care industry shifts its focus from volume to value, the government is looking at ways to pay for appropriateness of care rather than the volume of care. Like any new program, it takes time for folks to adjust and an industry to absorb the paradigm shift.

The government is now beginning to penalize the industry for unnecessary readmission for certain conditions and as a result, the health care industry is being rewarded—or penalized—for utilization of certain tests, among other things. Is this bad or good?

While the article suggests that this shift in focus might be less than ideal, I disagree. I believe it is important that we, as an industry, shift from volume to value as quickly as possible in order for the health care consumer to receive the best value for their dollar. The threat of being penalized for unnecessary readmissions or prescribing unnecessary tests is critical in our ability to reduce cost over the long term.

When health care providers complain, “their patients are sicker or present with more complex symptoms,” the government should review the complaint. And they often do and adjust for complexity of care or other organizational differentials. This is commonly referred to as a risk adjustment.

There is no question that teaching hospitals operate differently than community hospitals; however, in all health care environments the practice of medicine needs to be evaluated to determine where protocol and clinical pathway development makes sense. I realize that there are some growing pains and adjustments, but I believe that we need to create an environment where physicians and other care givers can determine what is appropriate for their patients while at the same time managing the unnecessary testing that often occurs. 

The article also suggests that health care organizations are intentionally gaming the system. For the most part, I do not believe that hospitals are deliberately trying to get away with anything. To think this is happening as a matter of standard practice is wrong. You have to remember that these measurement systems are relatively new and very complex, and that it takes time for organizations to adjust to the new protocol. In addition, this new mode of operation is creating an environment that is making organizations think about new approaches to care - which is a good thing.

The bottom line is that we have good people from health care organizations, payers and the government all trying to make the necessary adjustments in the industry to improve service, outcome and cost. We all need to work together so we can create a safe, reliable and reproducible system of care for our health care consumers.