This scholarly paper should be over the topic of your choice in the area of heal

Question

This scholarly paper should be over the topic of your choice in the area of health care cost cutting and cost effectiveness of providing care. This broad "umbrella topic" provides you with a plethora of topics such as diagnosis-related groups, HMOs, PPOs, movement to ambulatory care, managed care, generic drug use, etc. The paper is due the last day of class. This paper must: be at least 5 pages (double-spaced) not including cover page or references include at least 5 references from peer-reviewed journals or professional web sites that are no more than 5 years old be written in APA style with appropriate in-text citations, a reference list and a cover page (abstract not required). For information on APA style, view the NAU Online Library's "APA Style" page   I NEED HELP WITH THE PAPER I AM NOT SURE HOW TO DO APA FORMAT. THIS IS SUPPOSE TO BE 5 PAGES.    I NEVER PICKED A TOPIC SO IT COULD BE ANYTHING UNITED STATES HEALTH SYSTEM

Explanation / Answer

Table of Contents

1. Abstract 3:

2. A paper on area of health care cost cutting and cost effectiveness of providing care 4

3. Understanding the Value of Health Care

4. The Challenges of Health Care Costing

5. Paying for More Doesn't Always Get You More

6. Coordinated care

7. Higher pricing

8. A Solution: Bringing Accountability to Health Care

9. Conclusion

10. References 5

Abstract

U.s health care costs currently exceed 17% of GDP and continue to rise. Other countries spend less of their GDP on health care but have the same increasing trend. Explanations are not hard to find. The aging of populations and the development of new treatments are behind some of the increase. Perverse incentives also contribute: Third-party payors (insurance companies and governments) reimburse for procedures performed rather than outcomes achieved, and patients bear little responsibility for the cost of the health care services they demand. Instead of focusing on the costs of treating individual patients with specific medical conditions over their full cycle of care, providers aggregate and analyze costs at the specialty or service department level.

Making matters worse, participants in the health care system do not even agree on what they mean by costs. When politicians and policy makers talk about cost reduction and “bending the cost curve,” they are typically referring to how much the government or insurers pay to providers not to the costs incurred by providers to deliver health care services. Cutting payor reimbursement does reduce the bill paid by insurers and lowers providers’ revenues, but it does nothing to reduce the actual costs of delivering care.

Poor costing systems have disastrous consequences. It is a well-known management axiom that what is not measured cannot be managed or improved. Since providers misunderstand their costs, they are unable to link cost to process improvements or outcomes, preventing them from making systemic and sustainable cost reductions. For example, as payors introduce high copayments to limit the use of expensive drugs, costs may balloon elsewhere in the system should patients’ overall health deteriorate and they subsequently require more services.

Poor cost measurement has also led to huge cross-subsidies across services. Providers are generously reimbursed for some services and incur losses on others. These cross-subsidies introduce major distortions in the supply and efficiency of care. The inability to properly measure cost and compare cost with outcomes is at the root of the incentive problem in health care and has severely retarded the shift to more effective reimbursement approaches.

Finally, poor measurement of cost and outcomes also means that effective and efficient providers go unrewarded, while inefficient ones have little incentive to improve. Indeed, institutions may be penalized when the improvements they make in treatments and processes reduce the need for highly reimbursed services. Without proper measurement, the healthy dynamic of competition in which the highest-value providers expand and prosper breaks down. Instead we have zero-sum competition in which health care providers destroy value by focusing on highly reimbursed services, shifting costs to other entities, or pursuing piecemeal and ineffective line-item cost reductions. Current health care reform initiatives will exacerbate the situation by increasing access to an inefficient system without addressing the fundamental value problem: how to deliver improved outcomes at a lower total cost.

It simply requires a new way to accurately measure costs and compare them with outcomes. Our approach makes patients and their conditions not departmental units, procedures, or services the fundamental unit of analysis for measuring costs and outcomes.

Understanding the Value of Health Care:

The proper goal for any health care delivery system is to improve the value delivered to patients. Value in health care is measured in terms of the patient outcomes achieved per dollar expended. It is not the number of different services provided or the volume of services delivered that matters but the value. More care and more expensive care is not necessarily better care.

To properly manage value, both outcomes and cost must be measured at the patient level. Measured outcomes and cost must encompass the entire cycle of care for the patient’s particular medical condition, which often involves a team with multiple specialties performing multiple interventions from diagnosis to treatment to ongoing management. A medical condition is an interrelated set of patient circumstances that are best addressed in a coordinated way and should be broadly defined to include common complications and comorbidities. The cost of treating a patient with diabetes, for example, must include not only the costs associated with endocrinological care but also the costs of managing and treating associated conditions such as vascular disease, retinal disease, and renal disease. For primary and preventive care, the unit of value measurement is a particular patient population that is, a group with similar primary care needs, such as healthy children or the frail and elderly with multiple chronic conditions.

Better measurement of outcomes will, by itself, lead to significant improvements in the value of health care delivered, as providers’ incentives shift away from performing highly reimbursed services and toward improving the health status of patients. A powerful driver of value in health care is that better outcomes often go hand in hand with lower total care cycle costs. Spending more on early detection and better diagnosis of disease, for example, spares patients suffering and often leads to less complex and less expensive care later. Reducing diagnostic and treatment delays limits deterioration of health and also lowers costs by reducing the resources required for care. Indeed, the potential to improve outcomes while driving down costs is greater in health care than in any other field we have encountered. The key to unlocking this potential is combining an accurate cost measurement system with the systematic measurement of outcomes. With these powerful tools in place, health care providers can utilize medical staff, equipment, facilities, and administrative resources far more efficiently, streamline the path of patients through the system, and select treatment approaches that improve outcomes while eliminating services that do not.

The Challenges of Health Care Costing

Accurate cost measurement in health care is challenging, first because of the complexity of health care delivery itself. A patient’s treatment involves many different types of resources personnel, equipment, space, and supplies each with different capabilities and costs. These resources are used in processes that start with a patient’s first contact with the organization and continue through a set of clinical consultations, treatments, and administrative processes until the patient’s care is completed. The path that the patient takes through the system depends on his or her medical condition.

The already complex path of care is further complicated by the highly fragmented way in which health care is delivered today. Existing costing systems, which measure the costs of individual departments, services, or support activities, often encourage the shifting of costs from one type of service or provider to another, or to the payor or consumer. The micromanagement of costs at the individual organizational unit level does little to reduce total cost or improve value and may in fact destroy value by reducing the effectiveness of care and driving up administrative costs.

Any accurate costing system must, at a fundamental level, account for the total costs of all the resources used by a patient as she or he traverses the system. That means tracking the sequence and duration of clinical and administrative processes used by individual patients something that most hospital information systems today are unable to do. This deficiency can be addressed; technology advances will soon greatly improve providers’ ability to track the type and amount of resources used by individual patients. In the meantime, it is possible to determine the predominant paths followed by patients with a particular medical condition, as our pilot sites have done.

Paying for More Doesn't Always Get You More:

Many experts point to the way health care providers in the U.S. are typically paid for the services they deliver as a major culprit in driving our out-of-control costs. Under our fee-for-service system, most physicians, hospitals, and other providers receive a payment for each service, be it an office visit, lab test, or medical procedure regardless of whether or not they help (or harm) the patient. In other words, provider payment is based on the quantity of care provided, rather than the care actually needed by the patient, or the effectiveness of the treatment.

Providers usually don’t feel pressure to limit themselves from prescribing services that may not be necessary. And physicians’ fear of malpractice lawsuits may actually contribute to the problem by encouraging the practice of “defensive medicine.” Likewise, since most patients are shielded from the bulk of costs by their health insurance coverage, they may be inclined to welcome any medical service that has even the slightest chance of doing some good.

Coordinated care:

It surprises many people to discover that a very small portion of the U.S. population just 5 percent accounts for nearly half of total spending on health care, while 20 percent accounts for four-fifths of total spending. This relatively small slice of the population incurs such high costs because most of these individuals have complex medical problems. The problems include common but difficult-to-manage chronic diseases like diabetes and heart failure, as well as mental and behavioural health issues. Chronically ill people take more prescription drugs, undergo more tests and procedures, and are hospitalized more often than people in good health.

But the costs for these patients really skyrocket when the care they receive is poorly coordinated: when patients are referred by their primary care provider to a specialist, move in and out of the hospital, and transition from the hospital to home care or a long-term care facility, all with little oversight or communication between providers. In this environment, patients may undergo the same lab tests multiple times, they may get the wrong combination of medications, and serious conditions may get misdiagnosed. This not only leads to unnecessarily high costs, it also means poor care for the patients who most need help.

Higher pricing:

It is estimated that the U.S. spends up to one-third of its health care dollars on medical services that do nothing to improve our health and which may even be harmful. This “excess care” can be a byproduct of poor care coordination, such as when a patient has an MRI in his doctor’s office and then another one two weeks later in the hospital.

Excess care also stems from quality and safety problems. Each year, thousands of patients are treated for problems that shouldn’t have occurred in the first place, such as a serious infection picked up in the hospital. Overtreatment is also a big problem: opting for surgery, when medication or a less-invasive procedure would be equally effective (and less risky), is just one example.

Together, the combination of overuse and misuse of medical services, along with elevated prices, helps explain why quality of health care in the U.S. doesn’t match our nation’s high level of spending.

A Solution: Bringing Accountability to Health Care:

To get to a health care system that’s affordable yet provides high quality, we need to tackle the issues that have made things so expensive in the first place. Wholesale cuts to Medicare and Medicaid might reduce spending in the short term, but they would also mean slashing benefits and reducing access to care.

A better solution might be found in the dozens of innovative and promising experiments already under way in both the public and private sectors to transform how patient care is delivered and how we pay for it. Here are some of the more promising ideas, along with real-world examples of how they work.

Bundled payments. By paying health care providers one lump sum for all the services needed to treat a patient with a particular condition or illness, the incentive to do more simply to earn more disappears. Instead, the emphasis shifts to providing care that helps the patient get well quickly and stay well.

Global payments. The new global payment model is fundamentally different, because we have tools to make sure that the focus isn’t just on saving money. Health care providers must also meet certain quality criteria, like offering timely preventive screenings and promptly following up on test results with patients. They also receive bonuses if their patients stay healthy and avoid costly hospitalizations an incentive that benefits everybody.

Accountable care organizations. A new way of delivering and paying for patient care that is starting to take hold is the accountable care organization, or ACO. Typically, an ACO is a partnership between a payer, like a health insurance plan, and a group of providers primary care physicians, hospitals, specialists, rehabilitation centers, and long-term care facilities that agree to share responsibility, and sometimes the financial risk, for delivering quality health care to a population of patients.

To conclude:

The good news is that a lot of activity is already taking place in the private and public sectors to obtain greater value for our health care dollars. These include not only the accountable care systems you’ve read about here, but also new incentives that encourage providers and patients to make the best health care choices, efforts to expand access to medical homes and primary care, and initiatives to promote greater use of information technologies to focus health care resources where they’re needed most.

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