Thursday, 15 February 2007
Pay For Value Reimbursement
The Mayo Clinic has developed a new healthcare reimbursement system. President and CEO Denis Cortese M.D. and Chief Administrative Officer Robert Smoldt of the Mayo Clinic designed the new system to continue the improvement of healthcare while keeping costs low.
The current system — used by insurers and Medicare — is called Pay for Performance. This system rewards doctors, hospitals, clinics, and other healthcare providers with higher reimbursements for higher quality healthcare.
Cortese and Smoldt’s model is called Pay for Value. Like Pay for Performance, this system rewards higher quality care. But under the Pay for Value model, care facilities must also provide cost-efficient healthcare to get the maximum reimbursements.
“Pay for Value looks at both sides of the equation, quality and cost, and defines quality in a way that is meaningful to patients,” Smoldt said. “To have a health system that delivers the best care to every patient over a lifetime, America needs a more comprehensive approach to the problem.”
The ideal healthcare facility under the Pay for Value system would provide the highest patient satisfaction with the least amount of spending. But care facilities with low patient satisfaction or high spending would not get full reimbursements. The model’s supporters hope that the lower reimbursements will serve as an incentive to improve their quality and reduce the costs of care.
“We need to align the incentives in the system to patients’ interests,” said Dr. Cortese. “They want good outcomes in a system that treats them respectfully, at a reasonable cost. They don’t want expensive, invasive tests and procedures that aren’t going to improve their lives.”
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