Sunday, July 17, 2011

Getting the right mix of patients

Paul Levy recently included his BBC video clip on his blog, "Not Running a Hospital."

In the United States, of course, it would be the hospital administrators who would be more concerned about an empty hospital rather than a government official. The challenge going forward in the U.S. is for each hospital to have the right mix of patients for whom revenue comes from services provided and patients for whom revenue is from capitation. The costly facilities will have to be there for those patients for whom the hospital is at financial risk (the capitation groups). But there must also be enough patients for whom the hospital has a financial incentive to actually use the costly facilities and equipment. In such a situation, some patients are more likely to be admitted to the hospital than others based upon whether they are insured through capitation or through a fee-for-service group contract. At first glance, it would seem that it is the patients in capitation plans that are at the risk of being shorted. But if the revenue needs of the hospital lead to unnecessary utilization of inpatient services for others, they may experience unnecessary medical risks.

It would be nice if there was an easy alignment of population-based care, patient-centered care, and the effective financial support of hospitals. But neither the market nor a centralized command system (as represented in the BBC video clip) will produce or sustain such an alignment. Whatever comparative effectiveness research indicates is the best clinical pathway for a particular patient, the decisions made about his or her course of treatment will be shaped in part by how providers are compensated for that patient's care.

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