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Pay doctors to keep patients healthy rather than just for treating illness

Although the health system australia compares well internationally, costs are rising. So are chronic diseases related to unhealthy styles, such as heart disease, diabetes and some cancers life. health policy experts are increasingly concerned about the fragmentary nature of our health care system can cope with the challenges of the 21st century The root of these problems lies in the outdated system of payment of fee for service for doctors .

A slit of sunlight is the Council of Australian Governments’ (COAG) deal hospital funding signed between the Community and the states in April. Governments are committed to the development of models for better coordinated care and reduce avoidable readmissions to hospital. This includes testing a new model Household Health Care, where patients register at a medical clinic header for all your needs attention.

The model Household Health Care could provide an avenue for real reform of Medicare. But we still have to fix the antiquated way we pay for care – fees for services when patients are sick. Some of the recent most innovative ideas in payment reform can be found in an unexpected place :. United States

As US President Barack Obama outlined in a recent academic paper (the first for a sitting president), the Affordable Care Act (Obamacare) not only has reformed the system of health insurance , which has, in many cases, also it changed the way doctors are paid.

Therefore, how these alternative payment models work?

The first organizations, Accountable Care (ACO) are provider groups, including doctors and hospitals, which coordinate to meet the quality objectives and save on expenses.

Providers in ACO are paid for their services in the normal way through fee for service. But at the end of the year, providers have the chance to win an additional advantage :. Half of his “savings” in relation to expenditure for their patients

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So if you expect a group of Medicare patients to cost US $ 10 million over the year and service providers of these patients are able to reduce this to $ 9 million, providers will share $ 0.5 million in bonds.

This incentive is linked crucially on the ability of hospitals and medical clinics to meet the quality objectives. This could mean blood sugar control in diabetics or control blood pressure in patients with hypertension.

Other quality indicators are based on keeping patients out of hospital admissions for preventable, such as asthma complications or readmissions after routine surgery.

So if a group of doctors and hospitals can reduce their costs by keeping patients expected to have more hospital admissions, they can win.


The second model of alternative payment key through Obamacare includes variations on the model of “medical home”. It is a payment system “type of capitation”, where doctors are paid a “management fee” monthly for patients enrolled, which should cover all primary care needs. The fee is typically US $ 20 per month.

While some patients use more than their US $ 20 per month, others will use less, balance the overall budget.

Doctors have no incentive to recommend unnecessary appointments “tracking”. You can also use more efficient models of care, such as using nurses instead of doctors for routine tasks and coordinate care.

While many reforms payment of Obamacare are too new to have been fully evaluated, they offer the tantalizing possibility of cost control and quality improvement.

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A surprising goal that Obama is formulated to Medicare to make at least half of their payments through alternative payment models, including ACOs and medical homes. He is well on the way to meet this goal, with the current figure of 30%.

However, the most radical change in payment systems tested recently in the US addresses an issue commonly raised with traditional performance pay :. Patient compliance

For a group of patients at high risk of a heart attack, both doctors and patients were offered financial bonuses if performance targets are met. Doctors are paid based on maintaining patient LDL (bad) below a target value. Patients were paid regularly take their medications (to reduce cholesterol statin drugs).

This innovative intervention was based on electronic pill bottles that wirelessly transmit a signal when it opens internet. The study found a significant improvement in the results (LDL cholesterol reduction) -. But only when patients and doctors were both offered bonds

dual incentive schemes like these are quite radical. Raise the awkward question of where responsibility lies in patient compliance with treatment. However, the epidemic of chronic diseases of Australia requires us to consider such radical measures in existing public health policies have failed.

While Australia health policy seems to be stuck in a rut of defending the status quo, a quiet revolution is taking place in the US .. The lessons of the current experimentation in Obamacare and beyond They should inform our own policies to address chronic disease needs through payment reform.

Author: Peter Sivey, Associate Professor at the Faculty of Economics, Finance and Marketing, RMIT University

Courtesy: The Conversation

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