Building Sustainable Practice Transformation Through Payment Reform Initiatives

PURPOSE: Novel value-based payment approaches provide an opportunity to deploy and sustain health care delivery interventions, such as treatment planning documentation. However, limited data are available on implementation costs. METHODS: We described key factors affecting the cost of implementing care improvements under value-based payments, using treatment planning and Medicare's Oncology Care Model as examples. We estimated expected costs of implementing treatment plans for years 1 and 2-6 under (1) different staffing models, (2) use of technology, and (3) differences in the patients engaged. We compared costs to the payment amounts under the Oncology Care Model. RESULTS: Team-based models where staffing is aligned with skills needed for key tasks (eg, a combination of lay navigator, nurse, and physician) are more financially feasible when compared with using physicians or nurses alone. When existing staff are at or near capacity, hiring new staff focused on practice transformation activities allows adequate time for new initiatives without negative impacts on existing services. Investments in information technology can enhance staff productivity, but initial costs may be high. Interventions may not be financially feasible if implemented for a small patient volume or only for patients insured by a particular payer. Finally, costs may be higher for disadvantaged populations, and equity in care delivery may require higher payments from payers. CONCLUSION: Estimating the cost of implementing an intervention in different types of practice settings with various types of patients is essential to ensure that a value-based payment system will adequately support desired improvements in quality of care for all patients.

The paradox of the COVID-19 pandemic: the impact on patient demand in Japanese hospitals

Analyzing data from a large, nationally distributed group of Japanese hospitals, we found a dramatic decline in both inpatient and outpatient volumes over the three waves of the COVID-19 pandemic in Japan from February-December 2020. We identified three key reasons for this fall in patient demand. First, COVID-19-related hygiene measures and behavioral changes significantly reduced non-COVID-19 infectious diseases. Second, consultations relating to chronic diseases fell sharply. Third, certain medical investigations and interventions were postponed or cancelled. Despite the drop in hospital attendances and admissions, COVID-19 is said to have brought the Japanese health care system to the brink of collapse. In this context, we explore longstanding systematic issues, finding that Japan's abundant supply of beds and current payment system may have introduced a perverse incentive to overprovide services, creating a mismatch between patient needs and the supply of health care resources. Poor coordination among health care providers and the highly decentralized governance of the health care system have also contributed to the crisis. In order to ensure the long-term sustainability of the Japanese health care system beyond COVID-19, it is essential to promote specialization and differentiation of medical functions among hospitals, to strengthen governance, and to introduce appropriate payment reform.

VOLUNTARY Regulation: Evidence from Medicare Payment Reform

Government programs are often offered on an optional basis to market participants. We explore the economics of such voluntary regulation in the context of a Medicare payment reform, in which one medical provider receives a single, predetermined payment for a sequence of related healthcare services, instead of separate service-specific payments. This “bundled payment” program was originally implemented as a five-year randomized trial, with mandatory participation by hospitals assigned to the new payment model; however, after two years, participation was made voluntary for half of these hospitals. Using detailed claim-level data, we document that voluntary participation is more likely for hospitals that can increase revenue without changing behavior (“selection on levels”) and for hospitals that had large changes in behavior when participation was mandatory (“selection on slopes”). To assess outcomes under counterfactual regimes, we estimate a stylized model of responsiveness to and selection into the program. We find that the current voluntary regime generates inefficient transfers to hospitals, and that alternative (feasible) designs could reduce these inefficient transfers and raise welfare. Our analysis highlights key design elements to consider under voluntary regulation.

Radiation Oncology's Place in Payment Reform: ASTRO Advocates for a Place at the Table

In its current form, the Radiation Oncology Model (RO Model) prioritizes payment cuts over true value-based payment transformation. With significant modifications to the payment methodology, the reporting requirements, and recognition of the unique challenges faced by disadvantaged populations, the RO Model can protect patient access to care, preserve the physician-patient decision-making process, and ensure the delivery of high-quality, efficient radiation therapy treatment. The American Society for Radiation Oncology has spent several years advocating for a meaningful alternative payment model for radiation oncology and continues to push The Center for Medicare and Medicaid Innovation for changes to the RO Model that will recognize these key outcomes.