Potential Problems
One key concern is not knowing who—or what—will control the dollars once Medicare sets the bundled payment. Right now, hospitals receive the DRG payment and physicians bill for their own professional services. In the future, will all the money flow to the hospital? How will these dollars be distributed? Who determines who will be awarded performance bonuses?
In California and other states with significant managed-care populations and large medical groups, there is real-life experience with setting up efficient physician-hospital organizations (PHOs) to solve these issues. Some take the form of independent physician associations (IPAs), which represent the physicians in PHOs. There is no reason PHOs cannot be developed to administrate these bundled funds, and hospitalists, who are seeing an increasing number of hospitalized patients on medicine and surgery, should be key leaders in such PHO arrangements.
But HM is not a monolith in this discussion. The diversity in how HM groups are organized, their relationship with their hospitals, and how hospitalists or their groups receive funding can, and will, influence the group’s perspective on this issue. Hospitalist groups that are independent from their hospitals, or those that rely on referrals from primary-care physicians (PCPs) or the ED, might be justifiably concerned about all of “their” money having to flow through the hospital. Hospitalists who are employed by a hospital might be concerned that they will need to develop new metrics to justify their salaries and bonuses. HM groups that contract with the hospital might be concerned that a change in the flow of funding from Medicare to the hospital might make their contractual arrangements more difficult.
For those who battle with hospital administration over hospital support of their HM group, they might find bundling alleviates the need for the current use of Part A dollars to support hospitalists, because the new bundling of Part A (current payments for hospital facility charges) and Part B (current payment for physicians’ professional services) can allow for a more professional discussion, based on the value hospitalists bring. The need for subsidies or support could diminish or vanish.
Change Is Coming
No matter your perspective or viewpoint, one reality is coming into focus: This president and this Congress will make sweeping changes, and it appears from our conversations with Sen. Max Baucus (D-Mont.), chair of the powerful Senate Finance Committee (see “Medicine’s Change Agent,” May 2009, p. 18), that bundling and value-based purchasing will be part of healthcare reform.
With this in mind, SHM’s Public Policy Committee is actively engaged in trying to shape bundling in a way that fits emerging changes in the care of hospitalized patients. We want a system that works for the way healthcare will be practiced in the future, not a Band-Aid on the system of the past. This is very important stuff. Hospitalists will be affected by reform because so many of our patients are on Medicare and our compensation is generated by patient care in the hospital.
SHM has created an easy-to-use, Web-based system to send a message to members of Congress through a partnership with Capwiz. Visit www.hospitalmedicine.org/beheard to get started.
While the uncertainty of healthcare reform and, more specifically, payment reform is at times frightening, mainly because it is so sweeping and at this point so undefined, HM has been forged in the cauldron of change and ambiguity. Hospitalists are positioned as well as any health professionals to seize the opportunities that a new system will provide. And SHM will do its part to help shape the new reality and assist our members in creating successful strategies in this new environment. TH