For those who worked their way through the 1,328 pages of last week's CMS final outpatient PPS rule for 2007, the term "literature" was perhaps not top of mind. But deep in the Medicare OPPS rule's interstices lay significant new quality provisions that -- like soon-to-be-finalized recommendations of the National Quality Forum -- comprise key chapters of an unfolding story.
It is said that in all of literature there are really only about seven basic plots -- e.g., "new person comes to town." So, too, in health care, there is really only a handful of possible economic scenarios. One such scenario might be called "new service comes to bundle." This is the scenario that bedevils all innovators who try to introduce a seemingly cost-additive intervention into a classification for which payment is capped -- such as a prospective payment system organized around DRGs or APCs. Since higher payment is unlikely to accompany the new item (at least in the immediate term), the provider's incentive is to shun it. So what's an innovator to do?
One strategy tailored to the times is to let the intervention ride the jet stream of a broader quality or safety measure. We've previously noted the macro trends: that health care increasingly is about . . . well, health care (see earlier post, "It's the Medicine, Stupid") and that decisional velocity is increasingly top-down ("The Reimbursement Times They Are A-Changin'"). These dynamics are helping make some cost-additive innovations attractive to providers as a means for satisfying new quality/safety imperatives, especially when the latter are interlaced with "pay for performance" incentives. So, today, with a full DRG update riding on whether it hits 10 specified quality measures, a hospital is less likely to obsess over the cost of the aspirin that's supposed to be given each heart attack patient upon arrival.
The aspirin example, of course, is extreme and not quite telling. But think a little more broadly and you can begin to see how market plans for some new technologies could merge into the flight path of an ascendant quality/safety movement. For example, proposed new 2007 HEDIS measures for physician services identify four classes of medications "considered acceptable as primary therapy for long-term control of asthma." Thus, to meet the HEDIS standard, you have to use one of these classes of medications. In this same way, a discrete surgical safety innovation (say) that fosters compliance with a surgical quality standard might have the effect not only of benefiting patients, but of giving hospitals good reason to look beyond a service bundle's stifling economics.
That's the longer-term significance of last week's Medicare OPPS rule, which set in motion for hospital outpatient departments the same types of quality/"pay for performance" incentives that CMS now applies to inpatient services. There'll be different takes on the agency's action, to be sure. But whatever your view, these outpatient changes seem the latest sign of growing opportunities for innovators to give the familiar fable of "new service comes to bundle" a surprising plot twist.
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