The US Health Care Delivery System and Pay for Performance - Research Paper Example

Policy Analysis Process U.S. Health care Delivery System and Pay for Performance The introduction of a healthcare policy can be a difficult initiative. Still, the necessity of such action is significant. The current status of healthcare industry in the US is reviewed in this paper. An effort is made to analyze and evaluate the elements of the industry. At the same time, a new healthcare policy is suggested. The key parts of this policy have been designed to effectively address the quality and cost. The most important advantage of the suggested policy is the incorporation of strategies that benefit all stakeholders. It is concluded that the introduction of this new policy in regard to the healthcare industry of the US is feasible; still, the effectiveness of this strategy in the long run cannot be guaranteed. 1. Introduction The effectiveness of healthcare services is one of the major challenges that the government of the USA has to face. Through the decades, a series of plans have been developed to resolve the problem. Still, all these plans have been proved inappropriate for enhancing the quality of the country’s healthcare services. The specific topic is important at the level that it is related to the presentation of a policy that can assist in the improvement of healthcare services delivery in the USA. Thus, the significance of this topic is high. As already noted, this study focuses on the examination of the potential influence of ‘payment for performance’ policies on the quality of healthcare services delivery in the USA. In order for the framework and the goals of this study to be understood it is necessary that the critical terms of the paper are made clear. In this context, ‘payment for performance’, known also as value-based payment (Berenson, 2010, p.1), is a term used for reflecting the following condition – within each healthcare institute, the staff is paid based on the quality and not on the volume of services provided (Berenson, 2010, p.1). Another term which is highly related to this paper is the term ‘quality’. The role of quality in the healthcare system of the USA is described in the study of Jiang, Pang and Savin (2011). In the above study it is explained that quality has become a critical characteristic of modern healthcare systems (Jiang, Pang, & Savin, 2011). The term ‘quality’ in the above case reflects two important characteristics: a) the accessibility of healthcare services by people of different financial status and b) the ‘clinical outcomes of healthcare services’ (Jiang, Pang, & Savin, 2011, p.1). The key stakeholders in regard to the subject of this study are: a) the patients, b) the medical staff, c) the state, d) the suppliers and e) the public in general. The interests of these stakeholders need to be reviewed and evaluated at the level that they can influence the performance of the policy suggested. Moreover, the responses of the stakeholders to other, similar, policies could be also reviewed so that the understanding can be gained whether the suggested policy can be welcomed or not. Current paper presents a policy that has to resolve the following problem – can the performance-based payment scheme used in the healthcare services delivery sector in the USA be effective, especially in the long run? Also, which are the key challenges that the above scheme would have to face? In this context, the key areas of the suggested policy could be described as follows: a) alteration of criteria for measuring performance, b) alteration of rewards related to performance, c) the introduction of schemes focusing on the reduction of costs, and d) the establishment of schemes for helping the sector’s employees to increase their performance. The above areas of the policy suggested will be extensively reviewed and discussed, as their role in the improvement of the healthcare services delivery is crucial. 2. Overview of current knowledge The literature published in regard to this study’s subject focuses on the following issue – the delivery of healthcare services in the USA could be considerably improved if the existing payment system is appropriately alternated. The change from a volume-based payment scheme to a quality-based payment scheme is, in any case, an important part of the USA’s healthcare sector. The understanding of the potentials of the suggested policy to respond to the health needs of the public across UK requires the reference to the value of healthcare, as a concept related to both the private and the public life, as analyzed further below. According to Chung and Shauver (2009), healthcare is a crucial sector in the USA, as also in most countries worldwide. A reference can be made to the findings of a survey developed in 2007; the findings of this study indicated that healthcare sector is the second most important sector for voters across the USA (Chung & Shauver, 2009). In regard to the elements of the healthcare sector, emphasis should be given on the following three: ‘cost, quality and access’ (Chung & Shauver, 2009). Two of these elements, cost and quality, have been used for developing the policy suggested in this paper. It should be noted that the above elements necessarily appear in each healthcare policy; however, the level at which these elements are developed is not standardized. For example, certain healthcare policies can focus on quality while other can focus on cost. A healthcare policy is expected to be more effective when its elements, as described above, are equally developed (Chung & Shauver, 2009). Depending on the social, economic and technological environment, the elements of the healthcare sector can be differentiated. For example, in the case of the rural health, emphasis is placed on the following issues: a) the potential of people to afford the cost involved, b) the potentials of people to access the healthcare units and c) the development of schemes that focus on the health of the community (Clinton et al., 2012). On the other hand, healthcare services in the USA can be characterized as quite expensive (Isham, 2007); identifying strategies that could lead to the limitation of costs in the healthcare industry would make the access to the industry easier. At this point, reference should be made to the relationship between ‘payment and organization’ (Guterman & Drake, 2010). In regard to this issue, Guterman and Drake (2010) note that each organization uses its own payment rules. In the healthcare sector, a similar practice is used (Guterman & Drake, 2010). In line with this, Medicare, a well-known healthcare services provider, tends to pay first ‘those doctors and hospitals that act independently’ (Guterman & Drake, 2010). In other words, the payment policy of each organization can be differentiated at the level that the strategic framework of each organization is different. The relationship between the organization and its payment policy is reflected in a diagram presented in Figure 1 below. Moreover, the following issue should be taken into consideration – when designing a healthcare program, legislators may fail to respond to the interests of all stakeholders. Healthcare policies favoring certain stakeholders at the expense of others are common phenomenon. The interests of all stakeholders should be equally taken into consideration when a healthcare policy is being developed. Furthermore, the standardization of criteria used for designing and implementing a healthcare policy would be quite necessary for securing the viability of this policy in the long run. It should be noted that there is ‘information asymmetry between the provider and the purchaser of healthcare services’ (Jiang, Pang, & Savin, 2011, p.31). Figure 1 – Relationship between payment policies and organizations (Guterman & Drake, 2010, p.3) 3. Existing policy related to the topic The delivery of healthcare services in the USA is currently based on an extended framework of legislative and regulatory policy instruments. The most important instrument of such type is the Patient Protection and Affordable Care Act of 2010. This Act introduced a critical change in regard to the payment of doctors and hospitals – from 2010 onwards, doctors and hospitals are paid based on their performance, in terms of the quality of the services provided and not in terms of the volume of work finished (Berenson, 2010). The specific act is the key legislative text for securing the quality of healthcare services in the USA. Under certain terms, other legislative texts and instruments would be used for enhancing quality in regard to healthcare services at all economic levels. 4. Key issues The issues highlighted above lead to the assumption that the healthcare industry of the USA is still under development. Even if the quality of services in this industry is quite satisfactory, the costs involved are high. The suggested policy should focus on the alignment of the existing strategies with the needs of the local population and the country’s potential to support any relevant initiatives. The suggested policy should incorporate four major phases: a) the change of the criteria for measuring performance – until today, performance of the healthcare industry has been measured through specific techniques such as the review of statistics and local publications, the number of cases that were effectively managed; b) the alteration of rewards related to performance – high performance of medical staff should be rewarded even if the actual benefits for the organization have been limited; c) the introduction of a scheme for reducing costs; and d) the establishment of schemes for enhancing employee motivation – the change of the incentives of employees would result in the increase of their performance, a fact that would also benefit the organization. A risk will exist in the above case – the incentives of employees for supporting their new firm may change periodically under the influence of the discussions developed in the context of the community. Stakeholders will have a key role in the success of the suggested policy. In fact the role of each of the stakeholders in the particular policy could be described as follows: a) patients will support the policy by avoiding any severe conflict in regard to the policy (Little, 2007); b) the medical staff could promote the policy in practice, i.e. within the healthcare units; c) the state will be responsible for offering the funds required for the completion of this project; d) the public will consider the policy as valuable only if it was followed by a scheme for continuous monitoring and evaluation. The key values of the policy should be explained to the policy’s stakeholders so that appropriate measures are taken. The elimination of barriers when introducing the policy is quite difficult. At this point, reference should be made to the following fact – the financial or operational status of a healthcare unit cannot be standardized. This phenomenon is not related to the metrics used for measuring the unit’s performance but rather to the challenges that the healthcare industry in the US has to face. Moreover, it is possible for the following conflicts to appear – the limitation of cost can threaten the quality of services provided. Addressing all needs of a policy can be quite difficult, especially when this policy focuses on the healthcare needs of a particular group of the population. 5. Conclusions and recommendations According to the issues discussed above, the quality of healthcare services is depended on various factors. The introduction of effective policies can help these services to be improved only if the initiatives taken are welcomed, meaning that there are no oppositions, or at least no major ones, in regard to these initiatives. Also, the active participation of stakeholders in these policies can increase the chances of their success, either in the short or the long run. In practice, when efforts are made to establish a healthcare policy, the following problem can appear – the performance of the policy may not reach an expected level, a fact that can lead to the alteration or even to the replacement of the particular policy. In addition, stakeholders seem to set different criteria for evaluating a particular healthcare policy. This means, among other issues, that the completion of the policy’s evaluation process can be delayed, especially due to the lack of consent among the stakeholders. The above issues need to be taken into consideration by legislators when they initiate a reform of existing legal framework. At this point, the development of certain measures is critical. The recommendations presented below could help increase the quality of services in the healthcare industry. In order to proceed to the next step, the following initiatives should be taken: a) healthcare units across the USA should be reviewed and evaluated so that they are aligned with the terms included in the specific policy; b) costs should be limited only for an initial, short period of time; during this period, the potential of healthcare units to cover the difference in cost without decreasing the quality should be assessed; c) a mechanism should be introduced for securing the high quality of services during all phases of the restructuring process. Under certain terms, the findings of the above questions can be contradictory. For example, an employee can perform well only when the incentives given are aligned to his or her needs. References Berenson, R. (2010). Moving payment from volume to value: What role for performance measurement? Retrieved from http://www.rwjf.org/files/research/71568full.pdf Chung, K., & Shauver, M. (2009). Measuring quality in healthcare and its implications for pay-for-performance initiatives. Hand Clinics, 25(1): 71-81. Retrieved from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2692614/ Clinton, A., MacKinney, K., Mueller, J., Coburn, A., Lundblad, J., McBride, T., & Watson, S. (2012). Pursuing high performance in rural health care. Retrieved from http://ruralfutureslab.org/docs/Pursuing_High_Performance_in_Rural_Health_Care_010 212.pdf. Guterman, S., & Drake, H. (2010). Developing innovative payment approaches: Finding the path to high performance. Retrieved from http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2010/Jun/ 1401_Guterman_developing_innovative_payment_approaches_ib.pdf. Jiang, H., Pang, Z., & Savin, S. (2011). Performance-based contracts for outpatient medical services. Retrieved from http://www.jbs.cam.ac.uk/research/working_papers/2011/wp1103.pdf Isham, G. (2007). Overview quality strategies and pay for performance. Retrieved from http://iom.edu/~/media/Files/Activity%20Files/PublicHealth/HealthLiteracy/Roundtable onHealthLiteracyMeeting4GeorgeIsham.pdf. Little, J. (2007). Wanting it all: the challenge of reforming the US health care system. Retrieved from http://www.bos.frb.org/economic/conf/conf50/conf50.pdf. Read More