Five Projects that Could Contain Costs in Health Reform

HealthLeaders Media Staff, November 3, 2009

One of the biggest criticisms of any health reform package, particularly the latest one from the House, is the lack of concrete cost containment provisions.

However, a read through the bill's 1,990 pages finds a number of novel proposals that seek to test new ways of measuring and monitoring care.

With these projects, the secretary of Health and Human Services, perhaps through the granting of Medicare waivers, would try out a few ideas that might make the healthcare system not only produce better outcomes, but also become more cost-efficient.

"There's a lot of interesting ideas and pilot projects" in H.R. 3962 says Robert Laszewski, president of Health Policy and Strategy Associates of Washington, D.C. He adds the administration is proposing many such programs "because we're really not sure yet what is going to work."

Here are five such demonstration or pilot projects—most set up for only two or three years—geared to contain costs:

  • Post-Acute Care Services Payment Reform Plan and Bundling Pilot program. This program is designed to reduce hospital readmissions by "bundling" payments to skilled nursing facilities, inpatient rehabilitation facilities, long-term care hospitals, hospital-based outpatient rehabilitation facilities, and home health agencies that care for a patient after hospital discharge. Many of the specifics, however, have yet to be defined.

  • Accountable Care Organization Pilot Program. This project would test ways to incentivize providers, perhaps through monetary awards, to physicians to provide quality care, more efficiently, and at a lower cost.

  • Medical Home Pilot Program. Under this provision, states would be entitled to apply for pilot project grants to give comprehensive care and case management to patients with chronic illnesses, including medically fragile children and high-risk pregnant women. This program also could be used to test wireless technologies that allow practitioners to communicate directly with their patients in managing chronic illness and thereby reduce expensive, acute hospitalizations.

  • National Independent Monitor Pilot Program. This project is perhaps the most novel and bold. The administration would appoint an independent monitor to "oversee" large chains of skilled nursing facilities for some defined period of time.

These companies would submit applications to the administration if they wanted to be included, but their selection would be approved when "evidence suggests that one or more facilities of the chain are experiencing serious safety and quality of care problems" presumably those that result in a decline in quality and an increase in cost of that care.

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