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PUBH7555 Topics In Health Economics

tag 0 Download 9 Pages / 2,044 Words tag 24-09-2021
  • Course Code: PUBH7555
  • University: University Of Minnesota
    icon is not sponsored or endorsed by this college or university

  • Country: United States


Part 1. Physician payment

In traditional fee-for-service Medicare, physicians are paid on a per-service basis.  Payments are based on the “relative value units” of a particular service, reflecting the relative costliness of inputs. 

How does the mix of services provided by primary care physicians affect their reimbursement relative to specialists?
Describe the principal-agent problem in fee-for-service payment of physicians and physician-induced demand (also called supplier-induced demand). Describe the findings of Baker (2010). What does this imply about physician-induced demand?
Compare the structure of payment under the Alternative Quality Contract compared to fee-for-service reimbursement. How does this change the incentives for the volume of services provided by physicians? Are the findings of Song, et al. (2014) consistent with your theoretical prediction?
What is a potential unintended consequence of “global budgets” such as that in the Alternative Quality Contract? How does the AQC attempt to mitigate this incentive, and was the attempt successful?

Scenario 1: Alternative payment models include both patient-centered medical homes (low financial risk, essentially fee-for-service, but physicians receive a “case management” fee) and accountable care organizations (physicians are at financial risk for spending above a target).

Scenario 2: Alternative payment models just include accountable care organizations (Hussey et al. 2017). 

How might physician and hospital spending differ between Scenarios 1 and 2? Please explain your answer based on the lecture and course readings.

  1. Some policymakers have advocated for malpractice reform as a means for reducing health care spending.
  • Drawing from the readings and the lecture, describe conceptually why malpractice and health care utilization may be related.
  • Do you think malpractice reform would reduce unnecessary health care use? Cite empirical evidence for and against.

Part 2. Medicare payment of hospitals and post-acute providers and bundled payment

CMS’ Bundled Payments for Care Improvement Initiative (BPCI) defines episodes of care (initiated by hospital stays) and spending targets for traditional Medicare enrollees. Providers continue to be paid on a fee-for-service basis. If total spending exceeds the target, then the “contracting entity” pays Medicare the difference. If total spending is below the target, then Medicare pays the contracting entity the difference.

Consider two conditions:

Condition 1: analysts believe patients admitted to the hospital for Condition 1 are often unnecessarily discharged to an institutional post-acute care provider (for example, a skilled nursing facility or inpatient rehabilitation facility) where a home health provider could provide care more efficiently and effectively.

Condition 2: analysts believe that institutional post-acute care (such as SNF care) is very often clinically necessary after a hospital discharge for Condition 2. However, there is a high incidence of unnecessary hospital readmissions from post-acute care providers for patients with Condition

Separately describe which BPCI model is the best match for Condition 1 and 2. In each case, justify your decision by describing which contracting entity is in a better position to improve the efficiency and effectiveness of care, and explicitly describe the change in payment incentives from traditional Medicare to bundled payment for the contracting entity.
Explain an unintended consequence of bundled payment and describe a feature of BPCI that may offset this incentive.
List and describe at least one advantage and one disadvantage to having a longer duration episode covered by the bundled payment.
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