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Our experience with policies that offer incentives to physicians and hospitals to deliver higher-value care teaches us that before policies are implemented widely, rigorous studies should be conducted to determine whether they achieve their goals.

Multidrug-resistant bacterial diseases pose serious and growing threats to human health. While innovation is important to all areas of health research, it is uniquely important in antibiotics. Resistance destroys the fruit of prior research, making it necessary to constantly innovate to avoid falling back into a pre-antibiotic era. But investment is declining in antibiotics, driven by competition from older antibiotics, the cost and uncertainty of the development process, and limited reimbursement incentives. Good public health practices curb inappropriate antibiotic use, making return on investment challenging in payment systems based on sales volume. We assess the impact of recent initiatives to improve antibiotic innovation, reflecting experience with all sixty-seven new molecular entity antibiotics approved by the Food and Drug Administration since 1980. Our analysis incorporates data and insights derived from several multistakeholder initiatives under way involving governments and the private sector on both sides of the Atlantic. We propose three specific reforms that could revitalize innovations that protect public health, while promoting long-term sustainability: increased incentives for antibiotic research and development, surveillance, and stewardship; greater targeting of incentives to high-priority public health needs, including reimbursement that is delinked from volume of drug use; and enhanced global collaboration, including a global treaty.

Electronic health information exchange addresses a critical need in the US health care system to have information follow patients to support patient care. Today little information is shared electronically, leaving doctors without the information they need to provide the best care. With payment reforms providing a strong business driver, the demand for health information exchange is poised to grow. The Office of the National Coordinator for Health Information Technology, Department of Health and Human Services, has led the process of establishing the essential building blocks that will support health information exchange. Over the coming year, this office will develop additional policies and standards that will make information exchange easier and cheaper and facilitate its use on a broader scale. Adapted from the source document.

Since the introduction of the Hospital Readmission Reduction Program (HRRP), readmission penalties have been applied disproportionately to institutions that serve low-income populations. To address this concern, the US Centers for Medicare & Medicaid introduced a new, stratified payment adjustment method in fiscal year (FY; October 1 to September 30) 2019. To determine whether the introduction of a new, stratified payment adjustment method was associated with an alteration in the distribution of penalties among hospitals included in the HRRP. In this retrospective cross-sectional study, US hospitals included in the HRRP for FY 2018 and FY 2019 were identified. Penalty status of participating hospitals for FY 2019 was determined based on nonstratified HRRP methods and the new, stratified payment adjustment method. Hospitals caring for the highest proportion of patients enrolled in both Medicare and Medicaid based on quintile were assigned to the low-socioeconomic status (SES) group. Nonstratified and stratified Centers for Medicare & Medicaid payment adjustment methods. Net reclassification of penalties among all hospitals and hospitals in the low-SES group, in states participating in Medicaid expansion, and for 4 targeted medical conditions (acute myocardial infarction, heart failure, chronic obstructive pulmonary disease, and pneumonia). Penalty status by both payment adjustment methods (nonstratified and stratified) was available for 3173 hospitals. For FY 2019, the new, stratified payment method was associated with penalties for 75.04% of hospitals (2381 of 3173), while the old, nonstratified method was associated with penalties for 79.07% (2509 hospitals), resulting in a net down-classification in penalty status for all hospitals by 4.03 percentage points (95% CI, 2.95-5.11; P < .001). For the 634 low-SES hospitals in the sample, the new method was associated with penalties for 77.60% of hospitals (492 of 634), while the old method was associated with penalties for 91.64% (581 hospitals), resulting in a net down-classification in penalty status of 14.04 percentage points (95% CI, 11.18-16.90; P < .001). Among hospitals that were not low SES (quintiles 1-4), the new payment method was associated with a small decrease in penalty status (1928 vs 1889; net down-classification, 1.54 percentage points; 95% CI, 0.38-2.69; P = .01). Among target medical conditions, the greatest reduction in penalties was observed among cardiovascular conditions (net down-classification, 6.18 percentage points; 95% CI, 4.96-7.39; P < .001). The new, stratified payment adjustment method for the HRRP was associated with a reduction in penalties across hospitals included in the program; the greatest reductions were observed among hospitals in the low-SES group, lessening but not eliminating the previously unbalanced penalty burden carried by these hospitals. Additional public policy research efforts are needed to achieve equitable payment adjustment models for all hospitals.

A key element required for translating new knowledge into effective therapies is early-stage venture capital that finances the work needed to identify a lead molecule or medical device prototype and to develop it to the proof-of-concept stage. This early investment is distinguished by great uncertainty over whether the molecule or prototype is safe and effective, the stability of the regulatory standards to which clinical trials are designed, and the likelihood that large follow-on investments for commercial development can be secured. Regulatory and reimbursement policies have a profound impact on the amount of capital and the types of life science projects that investors pursue. In this article I analyze several recent trends in early-stage venture capital funding, describe how these trends are influenced by regulatory and reimbursement policies, and discuss the role of policy makers in bringing new treatments to market. Policy makers can foster renewed private investment into critically needed early-stage products by increasing Small Business Innovation Research (SBIR) funding and public support for clinical trials in targeted areas of interest; creating regulatory pathways to enable early testing of experimental compounds in limited populations; and offering economic incentives for investors and developers in designated therapeutic areas.

The true measure of health care reform's success is whether it drives down medical costs over the long term. The Patient Protection and Affordable Care Act has several features designed to modernize the delivery of services and thus ensure a more efficient, more effective, and less expensive health care system. These features include bundling medical services into larger payment groups, using value-based purchasing, and improving care coordination. These changes could spark a productivity revolution in health care that would make it much more affordable and simultaneously increase the quality of care. The success of these efforts at controlling long-run cost growth will require activism from the government and the private sector.The true measure of health care reform's success is whether it drives down medical costs over the long term. The Patient Protection and Affordable Care Act has several features designed to modernize the delivery of services and thus ensure a more efficient, more effective, and less expensive health care system. These features include bundling medical services into larger payment groups, using value-based purchasing, and improving care coordination. These changes could spark a productivity revolution in health care that would make it much more affordable and simultaneously increase the quality of care. The success of these efforts at controlling long-run cost growth will require activism from the government and the private sector.

The US government has dedicated substantial resources to help certain providers, such as short-term acute care hospitals and physicians, adopt and meaningfully use electronic health record (EHR) systems. We used national data to determine adoption rates of EHR systems among all types of inpatient providers that were ineligible for these same federal meaningful-use incentives: long-term acute care hospitals, rehabilitation hospitals, and psychiatric hospitals. Adoption rates for these institutions were dismally low: less than half of the rate among short-term acute care hospitals. Specifically, 12 percent of short-term acute care hospitals have at least a basic EHR system, compared with 6 percent of long-term acute care hospitals, 4 percent of rehabilitation hospitals, and 2 percent of psychiatric hospitals. To advance the creation of a nationwide health information technology infrastructure, federal and state policy makers should consider additional measures, such as adopting health information technology standards and EHR system certification criteria appropriate for these ineligible hospitals; including such hospitals in state health information exchange programs; and establishing low-interest loan programs for the acquisition and use of certified EHR systems by ineligible providers. [PUBLICATION ABSTRACT]

Billing-code modifiers allow clinicians to report their relationship to the patient at a given point in time and for a particular service rendered. Ultimately, they will be used to assess clinician performance, particularly with respect to resource utilization and cost.

Dr. Arnold Milstein discusses a law that constrains hospitals' ability to bill Medicare for a higher-paid diagnosis-related group when complications occur. The complications chosen include some “never events” — serious complications that should never occur in a safe hospital. On September 1, 2008, Medicare eliminated a long-standing presumption in its payment rules that, since hospitals were doing everything possible to prevent complications of treatment, taxpayers and patients should primarily bear the average cost consequences when complications occurred. A 2006 law, meant to motivate hospitals to accelerate improvement of patients' safety, constrains hospitals' ability to bill Medicare for a higher-paid diagnosis-related group when complications occur. 1 The constraint applies only to hospital-acquired conditions deemed “reasonably preventable” through the use of evidence-based guidelines. These initially included eight complication categories: foreign objects left in the body after surgery, air emboli, infusion of incompatible . . .

Physicians, scholars, and policymakers continue to be concerned about conflicts of interests among health care providers. At least two main types of objections to conflicts of interest exist. Conflicts of interests may be intrinsically troublesome if they violate providers’ fiduciary duties to their patients or they contribute to loss of trust in health care professionals and the health care system. Conflicts of interest may also be problematic in practice if they bias the decisions made by providers, adversely impacting patient outcomes or wastefully increasing health care costs. This latter objection may be observed in differences in the prescriptions written, procedures performed, or costs billed by health care professionals who have conflicting interests, when compared to those that do not have such financial relationships.