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Pay-for-Performance in Nursing Homes SUMR Presentation Mentor: Rachel Werner
Theory • People respond to incentives. • Current system: payment based on services/quantity, not health/quality • Final goal of health care system: improve health • Under P4P: Providers are rewarded for meeting pre-established targets in quality of care they deliver
Nursing Home Residents 2006: 1,375,661 Nursing Home Residents
States with P4P NH Program Red = Currently running P4P Pink = Planning
Types of Measures • Staffing Levels • Clinical Measures • Resident Satisfaction • Administrative Costs • Medicaid Utilization Ratio • Deficiencies
Models for Financial Incentives • Attainment – establish a target level of performance (Payment > 80% Staff Retention) • Ranking – measures performance against other providers (Payment > top 10%) • Improvement – Payment for achieving improvement over previous period. • Continuous – Payment each time appropriate care is delivered.
Iowa Started: July 2002 • Deficiency-free survey (2 pts) • Regulatory compliance with survey (1 pt) • Nursing hours provided (2 pts max) – 2 pts for >75 percentile • Resident satisfaction (1 pt) - >50th percentile • Resident advocate committee resolution rate (1 pt) - > 60th percentile • High employee retention rate (1 pt) - > 50th percentile • High occupancy rate (1 pt) – at or above 95th • Low administrative costs (1 pt) - >50th percentile • Special licensure classification (1 pt) • High Medicaid utilization (1 pt) - > 50th percentile • 7 pts and higher: 3% increase in daily per diem reimbursement raet. • 5-6 pts: 2% increase • 3-4 pts: 1% increase
Bigger Question • Does P4P affect health outcomes in nursing homes? • Difference between Nursing Home and Hospitals? • Effect on health disparities?
The Road to Universal Health Care:A Look at Singapore Mentor: Arnold Rosoff
Singapore • A rich history of public-funded health • A strong Confucian philosophy • Solidarity
Consumer-Directed Health Care • The Republican “Ace in the Hole” • Focuses on individual responsibility • A free market solution for health care • Competition – drives down prices • Individual Choice – eliminates moral hazard
The Singapore Model • Medisave (Medical Savings Accounts) • 6 – 8 % of income is placed in a personal MSA. • Administered by the Central Provident Fund (CPF) • Rolls over from year to year • Medishield (Catastrophic Medical Insurance) • Vast majority of Singaporeans buy in. • Low premiums, widely transparent benefits • Other ‘safety nets’ • Eldershield • Medifund
The Singapore Model • Lowering Costs: Moral Hazard or Rationing? • Limits on everything: from drugs to MSA withdrawals • Moral Hazard Myth? e.g. Hospital Wards • Responsibility: Individual or Family? • MSA funds – cover immediate family members
Additional Issues • Means Testing • Screening applicants based on income/wealth to determine subsidies • Very unpopular – hot political issue • Health Disparities • Haves vs. Have-nots? • Rise of private insurance • Adverse selection
Singapore: A Model for the US? • Distrust in the government • Focus on individual • Unwillingness to ration
Special thanks to the following people for their generous support: • The University of Pennsylvania Provost’s Diversity Fund • The Center for Health Equity Research and Promotion (CHERP) • Pennsylvania Department of Health Office of Health Equity • Arnold Rosoff and Rachel Werner • SUMR and LDI