A Rational Healthcare Payment System is Needed
In the July issue of Managed Healthcare Executive there was an interview with Karen Davis, President of the Commonwealth Fund, a private foundation based in New York that supports research on improvements in healthcare. In this interview I was struck by her comments relating to payment innovations. She is quoted in this article “But the bigger issue is whether the public and private sector can work together on payment…Some states may be willing to use their convening skills to bring different parties together to identify a payment model that is more rational instead of having so many different ways of paying. It’s consuming so much in administrative costs.”
I wholeheartedly agree with her assessment. With the recent passage of PPACA all eyes are focused on providing access to 32 million uninsured/underinsured people. However, there has been no attention to developing a rational payment approach to support this added burden on states and individual employers. For years, we have operated on a payment methodology created by Medicare which today is broken, or a system based on contracts based on discounts in return for volume that is no longer advantageous to employers. What do we do? Our current system is not sustainable. Anyone in the business realizes this and we need to change this quickly.
A rational payment process is needed and will be central to the success of a sustainable healthcare system. Since 2001 we have worked on ways to bring rationality to an irrational payment world. The spotlight of the sustainability of healthcare will be squarely on this word “rational reimbursement.”