Saturday, May 02, 2009

SFC Bungling, I Mean Bundling Health Care: #3

The Senate Finance Committee, led by Senators Max Baucus and Chuck Grassley, wants to do for local health care what America did in the Middle East, divide and conquer. By bundling payments for acute and post acute care services, hospitals will fight with rehab facilities, nursing homes and long term acute care hospitals over federal payments. Sure it will occur within the auspices of an Accountable Care Organization (ACO), but bickering will occur.

At least until hospitals, or other deep pocket investors, buy enough components to have a vertically integrated health care system. "Too big to care" is coming.

ACO's would be eligible to share in 50 percent of the savings generated to the Medicare program. Other advantages for ACO's include targeted relief from legal or regulatory impediments to provider cooperation.

For those who read post #1, physician referral behavior is not supposed to impact their income. Yet, the Senate Finance Committee left a huge loophole by grandfathering in existing doctor owned hospitals. What if a "physician investor" hospital is integrated enough to be an accountable care organization? The physician owned ACO could distribute half of the government's savings back to doctor investors. Is the government talking out of both sides of its mouth?

For the Senate Finance Committee proposals, a document link can be found at the bottom of this Politico story. Don't be surprised if you end up scratching your head. There is a method to their madness.

No comments: