Skip to content
  • About
  • Contact
  • Contribute
  • Book
  • Careers
  • Podcast
  • Recommended
  • Speaking
  • All
  • Physician
  • Practice
  • Policy
  • Finance
  • Conditions
  • .edu
  • Patient
  • Meds
  • Tech
  • Social
  • Video
    • All
    • Physician
    • Practice
    • Policy
    • Finance
    • Conditions
    • .edu
    • Patient
    • Meds
    • Tech
    • Social
    • Video
    • About
    • Contact
    • Contribute
    • Book
    • Careers
    • Podcast
    • Recommended
    • Speaking

Will replacing fee for service really reduce costs?

Jaan Sidorov, MD
Policy
September 2, 2011
11 Shares
Share
Tweet
Share

In this enlightened era of evidence-based medicine, you’d think that the progressive academics, viziers, and mandarins who are cluttering the policy making commentariat would pay more attention to what was tried before. That should be doubly true if those lessons come from that health care nirvana called Europe, where enlightened central bureaucracies wisely allocate health care for its caffè sipping, plaza strolling and beret adorned citizenry.

Case in point is “bundled payment,” which has been underway for several years in the Netherlands. Thanks to this timely New England Journal perspective from Jeroen Struijs and Caroline Baan, readers can get some insight about what is and isn’t known about the topic.

By way of background, the Dutch require citizens to buy subsidized private health insurance for “short-term level” services, such as outpatient care and acute hospitalizations; prolonged care and durable medical equipment is covered by public insurance. Their reliance on private insurance has been held up as a role model for the United States.

According to Drs. Struijs and Baan, starting in 2007, private insurers began offering global payments to legally defined physician “care groups” who, in turn, accept the up and downside risk for persons with a chronic condition, such as diabetes, COPD or vascular disease. The single payment is negotiable for a defined bundle of services related to the condition itself. The care groups are typically made up of primary care doctors. They, in turn, provide and arrange for all the necessary care services and, when necessary, contract with other non-hospital providers (for example, labs) or other services. Patients with services falling within the bundle coverage provisions have no out of pocket expenses.

So what happened?

1. Variability persisted. Bundled payments turned out to vary from group to group and cannot be explained by patients’ burden of illness or the intensity of services. Other factors that probably played a role were differences in how the bundled coverage terms were interpreted and, thinks the DMCB, the negotiating leverage of the various care groups.

2. Integration grew. Providers became organized with greater attention to coordination, protocols and consultations. There was a greater emphasis on use of the EHR. In surveys, physicians reported that they believed they are providing better care.

3. Transparency increased. Providers were obligated to document and report performance against established benchmarks.

but …

4. Outcomes, you ask? According to authors, “…it is still too early to draw conclusions about the quality of care or the effects on the overall cost of care.” There has been no observed impact on glucose control (A1c), lipids, patient satisfaction or cost. So far.

5. Market power increased? Some subcontractors reported that they are being squeezed by the care groups’ local market power. What’s more, patients’ freedom of choice in the selection of subcontractors may have been curtailed.

6. Bundle “boundaries?” The Dutch are still working to define just what services are covered by the chronic care bundle. That’s important, because the care groups have an incentive to cost shift.

Most U.S. observers seem to agree that the fee-for-service system is broken. Drs. Struijs and Baan are reminding us that replacing it, despite policy savoir faire of many U.S. europhiles, isn’t necessarily going to reduce costs, increase quality or not introduce its own set of unintended consequences.

Jaan Sidorov is an internal medicine physician who blogs at the Disease Management Care Blog.

Submit a guest post and be heard on social media’s leading physician voice.

Prev

Control and be responsible for your diabetes

September 2, 2011 Kevin 1
…
Next

The health status of children is linked to socioeconomic status

September 2, 2011 Kevin 6
…

Tagged as: Public Health & Policy

Post navigation

< Previous Post
Control and be responsible for your diabetes
Next Post >
The health status of children is linked to socioeconomic status

More by Jaan Sidorov, MD

  • Are clinically integrated networks a cure for checkbox medicine?

    Jaan Sidorov, MD
  • a desk with keyboard and ipad with the kevinmd logo

    Is the doctor of medicine degree vulnerable?

    Jaan Sidorov, MD
  • a desk with keyboard and ipad with the kevinmd logo

    Reasonable and necessary: 2 words Medicare has trouble with

    Jaan Sidorov, MD

More in Policy

  • Pediatricians grapple with guns in America, from Band-Aids to bullets

    Tasia Isbell, MD, MPH
  • Health care wins, losses, and lessons

    Robert Pearl, MD
  • Maximizing care amidst provider shortages: the power of measurement-based care

    Tom Zaubler, MD
  • Unveiling excessive medical billing and greed

    Amol Saxena, DPM, MPH
  • Chronic health issues and homelessness

    Michele Luckenbaugh
  • The impact of certificate of need laws on rural health care

    Jaimie Cavanaugh, JD and Daryl James
  • Most Popular

  • Past Week

    • Reigniting after burnout: 3 physician stories

      Kim Downey, PT | Physician
    • The erosion of patient care

      Laura de la Torre, MD | Physician
    • Inside the grueling life of a surgery intern

      Randall S. Fong, MD | Physician
    • 1 in 5 doctors will become disabled. Are you prepared?

      Amarish Dave, DO | Finance
    • Assertiveness in health care [PODCAST]

      The Podcast by KevinMD | Podcast
    • Misinformed claims and the offensiveness of discrediting COVID-19 vaccine development

      Angel Garcia Otano, MD | Conditions
  • Past 6 Months

    • Medical gaslighting: a growing challenge in today’s medical landscape

      Tami Burdick | Conditions
    • I want to be a doctor who can provide care for women: What states must I rule out for my medical education?

      Nandini Erodula | Education
    • Balancing opioid medication in chronic pain

      L. Joseph Parker, MD | Conditions
    • Reigniting after burnout: 3 physician stories

      Kim Downey, PT | Physician
    • Mourning the silent epidemic: the physician suicide crisis and suggestions for change

      Amna Shabbir, MD | Physician
    • I’m a doctor, and I almost died during childbirth

      Bayo Curry-Winchell, MD | Physician
  • Recent Posts

    • Assertiveness in health care [PODCAST]

      The Podcast by KevinMD | Podcast
    • Epigenetics and our inheritance to future generations

      Vishruth Nagam | Conditions
    • Practicing medicine with conviction

      Arthur Lazarus, MD, MBA | Physician
    • The power of memory in shaping human identity

      Emily F. Peters and Sandeep Jauhar, MD, PhD | Physician
    • How Tratak yoga reshaped my USMLE Step 2 prep

      Dr. Nikita Mehdiratta | Education
    • Transforming primary care for physician well-being [PODCAST]

      The Podcast by KevinMD | Podcast

Subscribe to KevinMD and never miss a story!

Get free updates delivered free to your inbox.


Find jobs at
Careers by KevinMD.com

Search thousands of physician, PA, NP, and CRNA jobs now.

Learn more

View 6 Comments >

Founded in 2004 by Kevin Pho, MD, KevinMD.com is the web’s leading platform where physicians, advanced practitioners, nurses, medical students, and patients share their insight and tell their stories.

Social

  • Like on Facebook
  • Follow on Twitter
  • Connect on Linkedin
  • Subscribe on Youtube
  • Instagram

CME Spotlights

From MedPage Today

Latest News

  • FDA Relents, Approves Novel Antidepressant After Many Rejections
  • OSHA Comes in for Both Praise and Harsh Criticism at House Hearing
  • New Insight Into Hyperglycemia Risk With PI3K Inhibitor for Breast Cancer
  • Oktoberfest Doctor: Not the Wurst Job You Could Have
  • Blue Shield of California Has Fix for MA Enrollees Worried About Co-Pays

Meeting Coverage

  • New Schizophrenia Treatments Are Coming: Don't Panic
  • Loneliness Needs to Be Treated Like Any Other Health Condition, Researcher Suggests
  • Stopping Medical Misinformation Requires Early Detection
  • AI Has an Image Problem in Healthcare, Expert Says
  • Want Better Health Outcomes? Check Out What Other Countries Do
  • Most Popular

  • Past Week

    • Reigniting after burnout: 3 physician stories

      Kim Downey, PT | Physician
    • The erosion of patient care

      Laura de la Torre, MD | Physician
    • Inside the grueling life of a surgery intern

      Randall S. Fong, MD | Physician
    • 1 in 5 doctors will become disabled. Are you prepared?

      Amarish Dave, DO | Finance
    • Assertiveness in health care [PODCAST]

      The Podcast by KevinMD | Podcast
    • Misinformed claims and the offensiveness of discrediting COVID-19 vaccine development

      Angel Garcia Otano, MD | Conditions
  • Past 6 Months

    • Medical gaslighting: a growing challenge in today’s medical landscape

      Tami Burdick | Conditions
    • I want to be a doctor who can provide care for women: What states must I rule out for my medical education?

      Nandini Erodula | Education
    • Balancing opioid medication in chronic pain

      L. Joseph Parker, MD | Conditions
    • Reigniting after burnout: 3 physician stories

      Kim Downey, PT | Physician
    • Mourning the silent epidemic: the physician suicide crisis and suggestions for change

      Amna Shabbir, MD | Physician
    • I’m a doctor, and I almost died during childbirth

      Bayo Curry-Winchell, MD | Physician
  • Recent Posts

    • Assertiveness in health care [PODCAST]

      The Podcast by KevinMD | Podcast
    • Epigenetics and our inheritance to future generations

      Vishruth Nagam | Conditions
    • Practicing medicine with conviction

      Arthur Lazarus, MD, MBA | Physician
    • The power of memory in shaping human identity

      Emily F. Peters and Sandeep Jauhar, MD, PhD | Physician
    • How Tratak yoga reshaped my USMLE Step 2 prep

      Dr. Nikita Mehdiratta | Education
    • Transforming primary care for physician well-being [PODCAST]

      The Podcast by KevinMD | Podcast

MedPage Today Professional

An Everyday Health Property Medpage Today
  • Terms of Use | Disclaimer
  • Privacy Policy
  • DMCA Policy
All Content © KevinMD, LLC
Site by Outthink Group

Will replacing fee for service really reduce costs?
6 comments

Comments are moderated before they are published. Please read the comment policy.

Loading Comments...