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To survey the policy-driven financial controls currently being used to drive physician change in the care of populations

This paper offers a review of current health care payment models and discusses the impact of each on the potential success of PHM initiatives. We present the benefits of a multi-part model, combining visit-based fee-for-service reimbursement with a monthly “care coordination payment” and a performance-based payment system.

A multi-part model removes volume-based incentives and promotes efficiency. However, it is predicated on a pay-for-performance framework that requires standardized measurement. Application of this model is limited due to the current lack of standardized measurement of quality goals that are linked to payment incentives.

Financial models dictated by health system payers are inextricably linked to the organization and management of health care.

There is a need for better measurements and realistic targets as part of a comprehensive system of measurement assessment that focuses on practice redesign, with the goal of standardizing measurement of the structure and process of redesign. Payment reform is a necessary component of an accurate measure of the associations between practice transformation and outcomes important to both patients and society.

Purpose – This chapter discusses the relationship between health insurance and hospitals’ decisions to adopt medical technologies. I focus on both how the extent of insurance coverage can increase incentives to adopt new treatments, and how the parameters of the insurance contract can impact the types of treatments adopted.

Methodology/approach – I provide a review of the previous theoretical and empirical literature and highlight evidence on this relationship from previous expansions of Medicaid eligibility to low-income pregnant women.

Findings – While health insurance has important effects on individual-level choices of health care consumption, increases in the fraction of the population covered by insurance has also been found to have broader supply side effects as hospitals respond to changes in demand by changing the type of care offered. Furthermore, hospitals respond to the design of insurance contracts and adopt more or less cost-effective technologies depending on the incentive system.

Research limitations/implications – Understanding how insurance changes supply side incentives is important as we consider future changes in the insurance landscape.

Originality/value of paper – With these previous findings in mind, I conclude with a discussion of how the Affordable Care Act may alter hospital technology adoption incentives by both expanding coverage and changing payment schemes.

Whereas many researchers have examined the way in which health institutions have been transformed through funding modalities, and particularly through prospective payment systems (PPS), few have investigated the architecture of these systems, that is, costs and cost variance. Focusing on the study of costs and on the production of hospital rates, this chapter shows that the French PPS, called “rate per activity” made possible what we call a policy of variance. For health policymakers, the aim was to make the different accounting figures between hospitals, and between ways of practising healthcare, visible, in order to reduce these variances. This policy was attended by uncertainty in the processes of quantification, which led to metrological controversies. As a consequence of the issues around the way of calculating costs, some accounts and calculations were redone. In this chapter, we consider the case of metrological controversy over the remuneration of costs for cystic fibrosis patients’ hospital stays, and over the action of a patient organization that criticized the costs calculated officially. It leads to the analysis of the way calculative infrastructures, as cost accounting and rates, are challenged, and how some actors try to stabilize them.

Bundled payments for care are an efficient mechanism to align payer, provider, and patient incentives in the provision of health care services for an episode of care. In this chapter, we use agency theory to examine the evolution of bundled payment programs in private and public payer arrangements, and postulate future directions for bundled payment development as a key component in the provision and payment of health care services.

This chapter assessed internal and external environmental factors that affect variations in rural hospital profitability with a focus on the impact of the Patient Protection and Affordable Care Act regulations that resulted in the expansion of Medicaid eligibility, as well as four Medicare programs that target rural hospitals. A cross section of 2,114 rural US hospitals operating during 2015 was used. The primary source of data was Medicare Hospital Cost Reports. Ordinary least squares regression with correction for serial correlation, using total margin and operating margin as dependent variables, was employed to ascertain the association between profitability and its correlates.

The mean values for operating margin and total margin were −0.0652 and 0.0259, respectively. Hospital profitability was positively associated with location in a Medicaid expansion state, classification by Medicare as a Critical Access Hospital or Rural Referral Center (total margin only), hospital size, system membership, and occupancy rate. Profitability was negatively associated with average length of stay, government ownership, Medicare and Medicaid share of admissions, teaching status, and unemployment rate.

This chapter found that the Medicaid expansions provided modest help for the financial condition of rural hospitals. However, the estimates for the four targeted Medicare Programs (i.e., Critical Access Hospital, Medicare Dependent, Sole Community Critical Access Hospital, and Rural Referral Center) were either small or not significant (p > 0.10). Therefore, these specially targeted federal programs may have failed to achieve their goals of preserving the financial viability of rural hospitals. This chapter concludes with implications for practice.

Researchers recommend a reorganization of the medical profession into larger groups with a multispecialty mix. We analyze whether there is evidence for the superiority of these models and if this organizational transformation is underway.

We summarize the evidence on scale and scope economies in physician group practice, and then review the trends in physician group size and specialty mix to conduct survivorship tests of the most efficient models.

The distribution of physician groups exhibits two interesting tails. In the lower tail, a large percentage of physicians continue to practice in small, physician-owned practices. In the upper tail, there is a small but rapidly growing percentage of large groups that have been organized primarily by non-physician owners.

While our analysis includes no original data, it does collate all known surveys of physician practice characteristics and group practice formation to provide a consistent picture of physician organization.

Our review suggests that scale and scope economies in physician practice are limited. This may explain why most physicians have retained their small practices.

Larger, multispecialty groups have been primarily organized by non-physician owners in vertically integrated arrangements. There is little evidence supporting the efficiencies of such models and some concern they may pose anticompetitive threats.

This is the first comprehensive review of the scale and scope economies of physician practice in nearly two decades. The research results do not appear to have changed much; nor has much changed in physician practice organization.

This paper focuses on the impact of recent federal health policy on local community efforts to support the survival of rural hospitals. Rural communities in the United States have an established tradition of providing public financial support to local hospitals. The Balanced Budget Act of 1997 (BBA) expanded Medicare’s prospective payment system to non-acute care services, which promised reduced hospital reimbursement. Part of this legislation, the Critical Access Hospital (CAH) program, was specifically designed to counter the negative impact the broader legislation was expected to have. This study was designed to investigate the hypothesis that counties receiving financial relief for local hospitals through participation in the CAH program would show decreases in county subsidy levels compared to other hospitals. All 123 hospitals in Kansas were studied in 1994, well before BBA legislation, and again in 2001. Data on county-level health care spending for each of the two years were abstracted from all county budgets in Kansas. The amounts counties contributed to local hospitals were calculated and compared in terms of CAH versus non-CAH hospitals with attention to patterns of increase. Results showed that CAH hospitals, in spite of participation in the federal program, received greater local public financial support and experienced greater funding increases than other community hospitals. The implications of these findings are discussed in terms of the circumstances of rural hospitals and recent changes in the CAH program.

For health services researchers and health services management educators, chronicling the unfolding of a country's implementation of national health insurance (NHI) is once in a lifetime opportunity. Rarely, do researchers have the opportunity to observe the macro and micro changes associated with turning a country's health care delivery system 180 degrees. Accordingly, we report on the first decade of Taiwan's changing delivery system and selected adaptations of health care management, providers and patients.

While there is established research that explores individual innovations across countries or developments in a specific health area, there is less work that attempts to match national innovations to specific systems of health governance to uncover themes across nations.

We used a cross-comparison design that employed content analysis of health governance models and innovation patterns in eight OECD nations (Australia, Britain, Canada, France, Germany, the Netherlands, Switzerland, and the United States).

Country-level model of health governance may impact the focus of health innovation within the eight jurisdictions studied. Innovation across all governance models has targeted consumer engagement in health systems, the integration of health services across the continuum of care, access to care in the community, and financial models that drive competition.

Improving our understanding of the linkage between health governance and innovation in health systems may heighten awareness of potential enablers and barriers to innovation success.