Posts Tagged - ‘fee-for-service’

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Healthcare Reform Penalizes Hospitals With High Readmission Rates

Wednesday, June 2nd, 2010

Image: fw190a8 under CC 3.0

When a person goes into the hospital, they hope to get out as soon as possible. Unfortunately, early discharge isn’t best if they later end up being readmitted.

Currently, the fee-for-service compensation system has health insurance plans paying a lump sum to hospitals for each treatment–making it more profitable to move patients out quicker. Sometimes, those patients aren’t provided with appropriate support to prevent their return to the hospital. Readmission is more costly for patients, in both health and financial terms.

Healthcare reform looks to change that, starting in 2012. In that year, hospitals with high rates of readmission will be financially penalized. It is a tactic to encourage appropriate-length hospital stays (as opposed to the highest possible turnover), as well as quality care after discharge. The exact details of that provision are as of yet unknown.

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How Could Hospitals Reduce Health Insurance Rates?

Wednesday, April 14th, 2010

Image: tahitianlime under CC 3.0

Health insurance companies are often blamed for increasing premiums. In turn, they point the finger at hospitals. According to them, hospitals demand ever-increasing reimbursement rates, which must be passed onto policy holders.

A group of teaching hospitals in Massachusetts, Partners HealthCare, is trying to lessen their impact on costs. They are putting $40 million towards a proposal intended to reduce the cost of a small group health insurance plan for small businesses. Insurers will receive the money, and be required to use it to decrease premiums.

State Senate President Therese Murray also plans to propose a change to the current fee-for-service system that encourages uncoordinated care, where hospitals get paid on a per-procedure basis.

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