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Quality of care: Related to reimbursement?

Quality elder care

Despite numerous national programs intended to ensure patients receive the best quality care, it is limited by how best to define quality. It is also dependent on your insurance. Those with government-sponsored programs such as Medicaid or Medicare are often given the barest minimum of care while those with private insurance are provided every option possible.


Despite numerous national programs intended to ensure patients receive high-quality surgical care contemporaneous quality improvement initiatives are limited by the challenges associated with developing universal consensus about how to best define quality and identify appropriate and actionable quality measures. Relevant procedure-specific outcomes are lacking in this study. It is felt that continuing to rely on peri-operative morbidity and mortality may not provide the most robust picture of surgical quality (Yu & Massarweh, 2019).

What is at issue?
Recent changes in government payment policies have pressured hospital to standardize nursing best practices for the prevention of hospital-acquired conditions. One of the biggest problems is hospital-acquired skin problems. The Center for Medicare and Medicaid Services (CMS) modified its inpatient prospective payment system in 2008 to reduce hospital reimbursement for pressure injuries not present on admission.

In 2015, CMS began penalizing reimbursement by 1% for the lowest performing group of hospitals with respect to composite rates of hospital-acquired pressure injury and other hospital-acquired conditions. While the Braden scale is most frequently used for nurses to determine those patients who are most at risk for skin issues, in reality, compliance to this surveillance is often lower when patients have a more acute need or require other intervention where the nursing time is reimbursed. Hospital-acquired pressure injury cost hospitals an estimated $9.1 to $11.6 billion annually.

This result raises additional concern about the value of directing nursing resources to initiate best practice for all patients if only 4% to 7% of patients are a high risk of developing a skin issue. This study found costs were expressed in terms of the societal value of reimbursement for patient care, rather than being limited only to hospital charges. Health care sector costs included those reflected through average reimbursement between government or commercial payer and hospital in addition to patient out-of-pocket co-pays. Societal costs included these transactional costs plus time costs to the patient for additional hospitalization caused by hospital-acquired pressure injury and opportunity costs incurred by the clinician for time repeating risk assessments. Health system administers may find themselves in a financial predicament to adopt steps to better follow the Braden scale results (Padula et al, 2019).

Our present system is broken
Hospital readmissions are costly indicators of quality of patient care and often are not covered by government-sponsored insurance such as Medicaid and Medicare. As part of the Affordable Care Act commonly known as obamacare, CMS links payments to Medicare admissions to the hospitals' readmission rate creating motivation for hospitals to reduce avoidable readmissions. It has been estimated that ¼ (0.25) of all 30-day hospital readmissions are preventable. In fact, many can be traced to inadequate post-discharge follow-up. Timely follow-up with primary care provider can improve care transition from the hospital setting to home setting. One item that can influence this is finding an office or physician that will accept Medicaid or Medicare.

In 2015 approximately 69% of doctors were taking new Medicaid patients versus 89% new private insurance. Much of this discrepancy has been found to be directly related to the amount of reimbursement for care with the government programs of Medicare/Medicaid. And is the case with this study, many states having a fragmented system for payment of government programs causing many doctors to be reluctant to join them. Even with incentives provided to doctors in this study, there was little improvement in the numbers of readmissions (Wiest et al, 2019).

The mechanism this study proposes is to give incentive for each provider to increase their capacity to best levels would be difficult to implement in the health care industry. This is because most patients don’t bear the cost of service directly. In some systems as in the UK, healthcare is funded through taxes and is free of charge to all residents. In others like in the US system, patients are required to pay for such as a co-pay. The problem is this payment is not tied to the performance of the provider and does not depend on patients’ condition. The yardstick competition is a regulatory system that creates cost-reduction incentives in service settings that regulators are interested in not only cost control but reducing wait times. It is used in most hospitals but has many failures. It has not lowered wait times nor has it improved the quality of care for the cost of that same care (Savva, Tezcan, & Yildiz, 2019).

Research: Methods for change
Across service areas, health care services have received little attention whereas scholars have found some common ground among performance indicators in public education. This study used hospital-level health care data sets from CMS and the American Hospital Association (AHA) to explore the patient perception of service quality are related to objective hospital performance. Medicine is a classic case where information asymmetry places limits on consumer sovereignty. Thus health policy area is a critical test for test for the link between citizen satisfaction and public performance. Due to the multiple public organizations, a lack of clarity exists about the most effective methods to evaluate performance.

Objective measures of performance are based on observable and quantifiable performance data. Using this type of data alone often ignores what is important to the public. Subjective measures however mostly rely on stakeholders or recipients perceptual judgments. Subjective measures are likely to be biased by perceptual constraints. Objective measures are influenced by political and technical constraints. Previous studies have ultimately found that overall patient satisfaction is positively associated with compliance with treatment guidelines. To aid with the quality of care hospitals compare the index used by CMS that uses multiple dimensions to rate hospital performance. Unfortunately, despite financial consequences associated with poor performance, significant improvement of the quality of care is not found (Cheon et al, 2019).

Possible methods to approach change
The Toyota production system has a process called lean or lean thinking. The important concept in lean is to divide activities into added value and non-value-added value. Value-added activities that are considered activities that satisfy a customer’s demand for product or service; all others are non-value-added. Lean management can create an organization that can accomplish more and better tasks with less time, less human support, less cost, less space, less trauma, and fewer mistakes. Hospitals have become important sites for lean application as a result of the need for performance improvement. Hospitals are and have been facing pressure to improve medical quality and operational efficiency. Previous studies done have shown the application of lean in health care such as improving quality of care, safety increasing patient and staff satisfaction, achieving productivity and cost efficiency and better financial outcomes.

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In China, medical insurance has expanded over the last 10 years. Hospitals are facing an increase in pressure because of limited growth in medical resources but at the same time a growth in patient outcomes during this time the Chinese government attempted to increase the quality of care. The plan they put forth in 2009 increased competition with a reduction of profit from pharmaceuticals, increase patient choice and growth of medical insurance to at least 90% of the entire population by 2011. Uses of payment methods of medical insurance payments like fee-for-services and total budgets have forced hospitals to reduce costs and improve productivity. By 2017 they implemented a compound payment method that uses diagnosis-related disease groups (DRG) as the primary method with capitation and per-diem payments to be supplementary. Public hospitals have had to pay more attention to justify the use of limited resources and improve operational efficiency. In healthcare, the lack of standard definition of the customer value of lean will impact the outcomes of its application.

Findings of the paper show the broader context has an important influence on applications of lean. One shortcoming was their study didn’t show enough attention spent on patient spending and patient safety in the hospitals with lean being implemented (Gao & Gurd, 2019). Changes in the healthcare market place since the implementation of ACA have shown patients having to spend more money on health care in general; pharmaceuticals in specific. Drug manufacturers can no longer expect to have commercial success by simply proving their drugs meet safety and efficacy with traditional clinical customers-providers. It has been reported that the US spends more on health care than any other industrialized country. But for all that money the system is not better and the care is inconsistent. Quality of care measures are increasingly being used to determine how much providers will be paid; government payers or private insurance.

As health systems consolidate and demand bigger price increases many insurance companies are being pressured not to increase premiums. One way to keep plans affordable is to exclude more expensive doctors and hospitals from the network. Insurers are worried because larger systems have more clout and command higher payments with narrower networks available to choose from. New provider payment models are emerging to align better to incentives for cost control and high-quality delivery of patient care. Competition between providers and increasing pressure from the public and commercial payers to lower costs while improving care are driving them toward more value-based care models (Santilli & Vogenberg, 2015).

In today’s healthcare environment there is an ever-increasing focus on the quality of care delivered by providers of all clinical services. Joint Commission and CMS are both requiring objective proof of the quality of services. Quality improvement practices and research are well within the scope of activities in which medical professionals should be engaged. New knowledge and a direct route to improving outcomes and delivery of patient care across clinical settings; reimbursement incentives should power this change (Mormer & Stevens, 2019).

Work Cited
Cheon, O. et al. (2019). Health in America: The relationship between subjective and objective assessments of hospitals. International Public Management Journal.

Gao,T. & Gurd, B. (2019). Organizational issues for lean success in China: Exploring a change strategy for lean success. BMC Health Services Research, 19 (66).

Mormer, E. & Stevens, J. (2019). Clinical quality improvement and quality improvement research. American Journal of Speech-Language Pathology.

Padula, W.V. et al. (2019). Value of hospital resources for effective pressure injury prevention: A cost-effectiveness analysis. BMJ Quality & Safety, 28(2).

Santilli, J. & Vogenberg, F.R. (2015). Key strategic trends that impact health care decision-making and stakeholder roles in the new marketplace. American Health & Drug Benefits, 8(1).

Savvan, N., Tezcan, T., & Yildiz, O. (2019). Can yardstick competition reduce waiting times? Management Science-INFORMS [Institute for Operations Research and Management Services]. PubsOnLine.

Wiest, D. et al. (2019). Outcomes of a citywide campaign to reduce Medicaid hospital readmissions with connection to primary care within seven days of hospital discharge. JAMA Network Open, 2(1).

Yu, J. & Massarweh, N.N. (2019). Surgical quality improvement: Working toward value or work in progress? Journal of Surgical Research.