Health affairs
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Review Comparative Study
The impact on hospitals of reducing surgical complications suggests many will need shared savings programs with payers.
Reducing the complications that patients experience following surgery has garnered renewed attention from the medical and policy community. Reducing surgical complications is, foremost, critically important for patients. Moreover, in a competitive environment increasingly characterized by transparency of outcomes, the surgical complication rate is an important measure of hospital performance that could strongly influence choices of care and care sites made by patients and payers. ⋯ We found that if a hospital's surgical inpatient volume is not growing, such a program results in negative cash flow. We also found that if a hospital's surgical volume is growing, and if the hospital can sufficiently reduce the average length-of-stay for surgical patients without complications, the cash flow could be positive. We recommend that hospitals with limited growth prospects that are nonetheless contemplating a surgical complication reduction program establish agreements with payers to share in any savings generated by the program.
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Accountable care organizations are intended to improve the quality and lower the cost of health care through several mechanisms, such as disease management programs, care coordination, and aligning financial incentives for hospitals and physicians. Providers employed several of these mechanisms in forming the integrated delivery networks of the 1990s. ⋯ Care coordination and information technology are proving more complicated and expensive to implement than anticipated, providers may lack the ability to implement these mechanisms, and primary care providers are in short supply. As in the 1990s, success depends on targeting specific populations, such as people with multiple chronic conditions who need and may benefit from coordinated care.
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The Medicare Shared Savings Program, created under the Affordable Care Act, will reward participating accountable care organizations that succeed in lowering health care costs while improving performance. Depending on how the organizations perform on several quality measures, they will "share savings" in Medicare Part A and B payments-that is, they will receive bonus payments for lowering costs. ⋯ After the costs of performance improvement, such as additional tests or visits, are accounted for, the savings would decrease or become cost increases. To achieve greater savings, accountable care organizations will have to lower costs by other means, such as through improved use of information technology and care coordination.
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High medical cost burden is defined as spending more than 10 percent of family income on health care. Despite decreased family income and rising unemployment caused by the recession of 2007-09, the percentage of people under age sixty-five with high medical cost burdens remained largely unchanged between 2006 and 2009, at approximately 19 percent. ⋯ The percentage did not change during the recent recession because decreased family income was offset by decreased out-of-pocket health spending. Virtually all of this decreased spending was because of lower spending on prescription drugs as people shifted from brand-name medications to less expensive generics.