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

  • The realities of immigrant health care served hot from America’s melting pot

    Stella Cho
  • Healing the damaged nurse-physician dynamic

    Angel J. Mena, MD and Ali Morin, MSN, RN
  • Deaths of despair: an urgent call for a collective response to the crisis in U.S. life expectancy

    Mohammed Umer Waris, MD
  • Breaking down the barriers to effective bar-code medication administration

    Amy Dang Craft
  • The locums industry has a beef problem

    Aaron Morgenstein, MD
  • Canada’s health workers are sounding the alarm. We must act, now.

    Ivy Lynn Bourgeault, PhD
  • Most Popular

  • Past Week

    • The untold struggles patients face with resident doctors

      Denise Reich | Conditions
    • What is driving physicians to the edge of despair?

      Edward T. Creagan, MD | Physician
    • Beyond pizza and pens: National Doctors’ Day should be about saving lives

      James Young, MD | Physician
    • Physicians are a finite resource we need to protect

      Jack Resneck, Jr., MD | Physician
    • From clocking in to clocking out: the transition to retirement

      Debbie Moore-Black, RN | Conditions
    • How understanding cultural backgrounds can lead to better patient care [PODCAST]

      The Podcast by KevinMD | Podcast
  • Past 6 Months

    • The real cause of America’s opioid crisis: Doctors are not to blame

      Richard A. Lawhern, PhD | Meds
    • Nobody wants this job. Should physicians stick around?

      Katie Klingberg, MD | Physician
    • The fight for reproductive health: Why medication abortion matters

      Catherine Hennessey, MD | Physician
    • Resetting the doctor-patient relationship: Navigating the challenges of modern primary care

      Jeffrey H. Millstein, MD | Physician
    • It’s time for C-suite to contract directly with physicians for part-time work

      Aaron Morgenstein, MD & Corinne Sundar Rao, MD | Physician
    • The Titanic sinking: a metaphor for the impending collapse of medicine

      Aaron Morgenstein, MD & Corinne Sundar Rao, MD & Shreekant Vasudhev, MD | Physician
  • Recent Posts

    • How understanding cultural backgrounds can lead to better patient care [PODCAST]

      The Podcast by KevinMD | Podcast
    • From license to loneliness: the dilemma of retired physicians

      Richard Plotzker, MD | Physician
    • Tackling the health care crisis with artificial intelligence: Combating physician and nursing shortages in the United States

      Harvey Castro, MD, MBA | Tech
    • From hope to heartbreak: a story of loss in the ICU

      Ton La, Jr., MD, JD | Conditions
    • Unlearning our habits: a journey from intelligence to wisdom

      Brian Sayers, MD | Physician
    • Lessons from an orthopedic surgery journey [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

  • Experts Call for PBM Transparency During Senate Hearing
  • Want to Fix Medicare Pay for Primary Care Docs? How About Two Fee Schedules?
  • OTC Narcan Approval Opens New Doors in Fight Against Opioid Crisis
  • U.S. 'Flying Blind' When It Comes to Data on Substance Use in Pregnancy
  • Fear of Family Separation a Barrier to Addiction Care During Pregnancy

Meeting Coverage

  • VTE Risk in Recurrent Ovarian Cancer Increases With More Lines of Chemotherapy
  • Obesity's Impact on Uterine Cancer Risk Greater in Younger Age Groups
  • Oral Roflumilast Effective in the Treatment of Plaque Psoriasis
  • Phase III Trials 'Hit a Home Run' in Advanced Endometrial Cancer
  • Cannabis Use Common in Post-Surgery Patients on Opioid Tapering
  • Most Popular

  • Past Week

    • The untold struggles patients face with resident doctors

      Denise Reich | Conditions
    • What is driving physicians to the edge of despair?

      Edward T. Creagan, MD | Physician
    • Beyond pizza and pens: National Doctors’ Day should be about saving lives

      James Young, MD | Physician
    • Physicians are a finite resource we need to protect

      Jack Resneck, Jr., MD | Physician
    • From clocking in to clocking out: the transition to retirement

      Debbie Moore-Black, RN | Conditions
    • How understanding cultural backgrounds can lead to better patient care [PODCAST]

      The Podcast by KevinMD | Podcast
  • Past 6 Months

    • The real cause of America’s opioid crisis: Doctors are not to blame

      Richard A. Lawhern, PhD | Meds
    • Nobody wants this job. Should physicians stick around?

      Katie Klingberg, MD | Physician
    • The fight for reproductive health: Why medication abortion matters

      Catherine Hennessey, MD | Physician
    • Resetting the doctor-patient relationship: Navigating the challenges of modern primary care

      Jeffrey H. Millstein, MD | Physician
    • It’s time for C-suite to contract directly with physicians for part-time work

      Aaron Morgenstein, MD & Corinne Sundar Rao, MD | Physician
    • The Titanic sinking: a metaphor for the impending collapse of medicine

      Aaron Morgenstein, MD & Corinne Sundar Rao, MD & Shreekant Vasudhev, MD | Physician
  • Recent Posts

    • How understanding cultural backgrounds can lead to better patient care [PODCAST]

      The Podcast by KevinMD | Podcast
    • From license to loneliness: the dilemma of retired physicians

      Richard Plotzker, MD | Physician
    • Tackling the health care crisis with artificial intelligence: Combating physician and nursing shortages in the United States

      Harvey Castro, MD, MBA | Tech
    • From hope to heartbreak: a story of loss in the ICU

      Ton La, Jr., MD, JD | Conditions
    • Unlearning our habits: a journey from intelligence to wisdom

      Brian Sayers, MD | Physician
    • Lessons from an orthopedic surgery journey [PODCAST]

      The Podcast by KevinMD | Podcast

MedPage Today Professional

An Everyday Health Property Medpage Today iMedicalApps
  • 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...