I read with interest this morning an article by Erin McCann, Associate Editor at Healthcare IT News. Ms. McCann shines a bright light on the sad fact that under today’s reimbursement system, better care doesn’t always yield better business results.
I read with interest this morning an article by Erin McCann, Associate Editor at Healthcare IT News. Ms. McCann shines a bright light on the sad fact that under today’s reimbursement system, better care doesn’t always yield better business results. That’s because healthcare organizations aren’t incentivized to eliminate profitable procedures (tests, medical imaging, and surgeries) that may not benefit patients. And under the way most hospitals and clinicians are paid today, why would we expect them to do otherwise?
This is a conundrum not just for American hospitals and clinics. I’ve seen it play out in many other countries around the world, including health systems that we Americans might consider quite socialized. Even in these countries there is often a disconnect between the payer of care (government plus or minus private insurance) and the organizations and clinicians who deliver care. One would think that if government could save money by delivering health services more efficiently, technologies that would make that happen would be rapidly deployed. But that is not the case often because the organizations and clinicians delivering the services are incentivized (paid) to keep doing things the way they’ve always done them.
Most hospitals and health systems operate on pretty thin margins. They don’t have the luxury of killing a cash cow–being able to turn away paying customers (patients) from expensive tests and procedures. By doing so, they are literally shooting themselves in the foot.
Nothing much will change until payors (public and private) around the world remove the perverse incentives that stop innovation in healthcare delivery dead in its tracks. We’ll never be able to transform health and healthcare with eHealth, mHealth, tele-health, telemedicine, and so many other technologies that could help clinicians deliver higher quality, more convenient and cost effective care until we finally and fully address this all too common conundrum in healthcare.