Vertical integration and optimal reimbursement policy

Alternative Payment Models and Associations With Stroke Outcomes, Spending, and Service Utilization: A Systematic Review

Stroke contributes an estimated $28 billion to US health care costs annually, and alternative payment models aim to improve outcomes and lower spending over fee-for-service by aligning economic incentives with high value care. This systematic review evaluates historical and current evidence regarding the impacts of alternative payment models on stroke outcomes, spending, and utilization. Included studies evaluated alternative payment models in 4 categories: pay-for-performance (n=3), prospective payments (n=14), shared savings (n=5), and capitated payments (n=14). Pay-for-performance models were not consistently associated with improvements in clinical quality indicators of stroke prevention. Studies of prospective payments suggested that poststroke spending was shifted between care settings without consistent reductions in total spending. Shared savings programs, such as US Medicare accountable care organizations and bundled payments, were generally associated with null or decreased spending and service utilization and with no differences in clinical outcomes following stroke hospitalizations. Capitated payment models were associated with inconsistent effects on poststroke spending and utilization and some worsened clinical outcomes. Shared savings models that incentivize coordination of care across care settings show potential for lowering spending with no evidence for worsened clinical outcomes; however, few studies evaluated clinical or patient-reported outcomes, and the evidence, largely US-based, may not generalize to other settings.

Provider Integrated Medicare Advantage Plans Are Associated With Differences In Patterns Of Inpatient Care

Health systems have increasingly developed integrated Medicare Advantage (MA) plans to align financial incentives and improve coordination of care and services across payer and provider. However, little is known about integrated MA plans' effects on patient outcomes and care processes. We used 2015 MA hospitalization data to assess whether these new models are associated with differences in the processes that take place during hospitalizations and to differences in patient outcomes. We found that enrollees who received care in a fully integrated context were less likely to disenroll from Medicare Advantage or switch MA plans and had marginally lower adjusted mortality rates, compared to enrollees hospitalized in less integrated settings-with no differences in readmissions between the two groups. The fully integrated enrollees also acquired more diagnoses but were less often admitted to the ICU compared to other patients admitted to the same hospitals. As the number of these arrangements continues to grow, the potential advantages of coordination may need to be balanced against the increased cost to Medicare associated with apparently more diagnostic complexity.

Productivity growth of skilled nursing facilities in the treatment of post-acute-care-intensive conditions

BACKGROUND

Health care is believed to be suffered from a "cost disease," in which a heavy reliance on labor limits opportunities for efficiencies stemming from technological improvement. Although recent evidence shows that U.S. hospitals have experienced a positive trend of productivity growth, skilled nursing facilities are relatively "low-tech" compared to hospitals, leading some to worry that productivity at skilled nursing facilities will lag behind the rest of the economy.

OBJECTIVE

To assess productivity growth among skilled nursing facilities (SNFs) in the treatment of conditions which frequently involve substantial post-acute care after hospital discharge.

METHODS

We constructed an analytic file with the records of Medicare beneficiaries that were discharged from acute-care hospitals to SNFs with stroke, hip fracture, or lower extremity joint replacement (LEJR) between 2006 and 2014. We populated each record for 90 days starting at the time of SNF admission, detailing for each day the treatment site and all associated costs. We used ordinary least square regression to estimate growth in SNF productivity, measured by the ratio of "high-quality SNF stays" to total treatment costs. The primary definition of a high-quality stay was a stay that ended with the return of the patient to the community within 90 days after SNF admission. We controlled for patient demographics and comorbidities in the regression analyses.

RESULTS

Our sample included 1,076,066 patient stays at 14,394 SNFs with LEJR, 315,546 patient stays at 14,154 SNFs with stroke, and 739,608 patient stays at 14,588 SNFs with hip fracture. SNFs improved their productivity in the treatment of patients with LEJR, stroke, and hip fracture by 1.1%, 2.2%, and 2.0% per year, respectively. That pattern was robust to a number of alternative specifications. Regressions on year dummies showed that the productivity first decreased and then increased, with a lowest point in 2011. Over the study period, quality continued to rise, but dominated by higher costs at first. Costs then started to decrease, driving productivity to grow.

CONCLUSION

There has been substantial productivity growth in recent years among SNFs in the U.S. in the treatment of post-acute-care-intensive conditions.

Post-acute care reform: Implications and opportunities for hospitalists

Nearly all practicing hospitalists have firsthand experience discharging patients to post-acute care (PAC), which is provided by inpatient rehabilitation facilities, skilled nursing facilities, or home healthcare providers. Many may not know that PAC is poised to undergo transformative change, spurred by recent legislation resulting in a range of reforms. These reforms have the potential to fundamentally reshape the relationship between hospitals and PAC providers. They have important implications for hospitalists and will open up opportunities for hospitalists to improve healthcare value. In this article, the authors explore the reasons for PAC reform and the scope of the reforms. Then they describe the implications for hospitalists and hospitalists' opportunities to Choose Wisely and improve healthcare value for the rapidly growing number of vulnerable older adults transitioning to PAC after hospital discharge.

Vertical integration: hospital ownership of physician practices is associated with higher prices and spending

We examined the consequences of contractual or ownership relationships between hospitals and physician practices, often described as vertical integration. Such integration can reduce health spending and increase the quality of care by improving communication across care settings, but it can also increase providers' market power and facilitate the payment of what are effectively kickbacks for inappropriate referrals. We investigated the impact of vertical integration on hospital prices, volumes (admissions), and spending for privately insured patients. Using hospital claims from Truven Analytics MarketScan for the nonelderly privately insured in the period 2001-07, we constructed county-level indices of prices, volumes, and spending and adjusted them for enrollees' age and sex. We measured hospital-physician integration using information from the American Hospital Association on the types of relationships hospitals have with physicians. We found that an increase in the market share of hospitals with the tightest vertically integrated relationship with physicians--ownership of physician practices--was associated with higher hospital prices and spending. We found that an increase in contractual integration reduced the frequency of hospital admissions, but this effect was relatively small. Taken together, our results provide a mixed, although somewhat negative, picture of vertical integration from the perspective of the privately insured.