Monday, February 20, 2006
More on Knowing Cost
Previous contributor Neil Whipkey, Florida hospital CEO, has this to say in response to the recently posted comments of Tom McNulty:
.............................
I find the comments of Tom McNulty both informative and interesting. It may very well be that we, as a collective business, have no clue as what our actual costs are. As the administrator of one hospital in a two hospital town I am continually amazed at the vast differences in the prices the two facilities charge for the same procedure. This has provided for some lively conversation among our local population.
Since my campaign for universal coverage, one payer, and a national tax to pay for health care seems to be on a very slow track to nowhere I have come up with another cost savings idea. It may not be original but I have not seen it get any press. Hospitals are essentially reimbursed a flat rate for a specific diagnosis. It seems that surgeons are paid a flat rate for a procedure performed in a hospital. The hospitals and the surgeons know going in what their reimbursement will be. Not so with medicine physicians as they get paid according to the amount of hospital visits they make on a given patient. They have no incentive, not financially anyway, to promote moving a patient to a level of care less than that offered by a hospital.
Change the payment structure for medicine physicians to a plan similar to how hospitals and surgeons are paid and you will see hospital overutilization go away in a proverbial heart beat. Savings would be huge and I am convinced patient care will improve. It is unhealthy for patients to stay in hospitals longer then necessary. Inappropriate extended stays are not good medicine.
Just think, less resources expended and better patient care. That sounds like something we all might be able to agree upon.
Previous contributor Neil Whipkey, Florida hospital CEO, has this to say in response to the recently posted comments of Tom McNulty:
.............................
I find the comments of Tom McNulty both informative and interesting. It may very well be that we, as a collective business, have no clue as what our actual costs are. As the administrator of one hospital in a two hospital town I am continually amazed at the vast differences in the prices the two facilities charge for the same procedure. This has provided for some lively conversation among our local population.
Since my campaign for universal coverage, one payer, and a national tax to pay for health care seems to be on a very slow track to nowhere I have come up with another cost savings idea. It may not be original but I have not seen it get any press. Hospitals are essentially reimbursed a flat rate for a specific diagnosis. It seems that surgeons are paid a flat rate for a procedure performed in a hospital. The hospitals and the surgeons know going in what their reimbursement will be. Not so with medicine physicians as they get paid according to the amount of hospital visits they make on a given patient. They have no incentive, not financially anyway, to promote moving a patient to a level of care less than that offered by a hospital.
Change the payment structure for medicine physicians to a plan similar to how hospitals and surgeons are paid and you will see hospital overutilization go away in a proverbial heart beat. Savings would be huge and I am convinced patient care will improve. It is unhealthy for patients to stay in hospitals longer then necessary. Inappropriate extended stays are not good medicine.
Just think, less resources expended and better patient care. That sounds like something we all might be able to agree upon.
