Design of price incentives for adjunct policy goals in formula funding for hospitals and health services

Background. Hospital policy involves multiple objectives: efficiency of service delivery, pursuit of high quality care, promoting access. Funding policy based on hospital casemix has traditionally been considered to be only about promoting efficiency. Discussion. Formula-based funding policy can be (and has been) used to pursue a range of policy objectives, not only efficiency. These are termed 'adjunct' goals. Strategies to incorporate adjunct goals into funding design must, implicitly or explicitly, address key decision choices outlined in this paper. Summary. Policy must be clear and explicit about the behaviour to be rewarded; incentives must be designed so that all facilities with an opportunity to improve have an opportunity to benefit; the reward structure is stable and meaningful; and the funder monitors performance and gaming

EMTALA: Medicare\u27s Unconstitutional Condition on Hospitals

The Emergency Medical Treatment and Active Labor Act ( EMTALA ) requires every Medicare-contracting hospital with an emergency department ( ED ) to screen and stabilize anyone with an emergency condition, regardless of ability to pay. Enacted in 1986, EMTALA vastly expanded Medicare\u27s initial focus on elderly and disabled beneficiaries and imposed enormous financial liabilities. Neither the Supreme Court nor any Circuits have addressed EMTALA\u27s constitutionality. Although this longstanding statute may not be reconfigured any time soon, it is important to consider the constitutional legitimacy of legislation carrying such an enormous and growing impact. This Article proposes that EMTALA violates the Fifth Amendment\u27s Takings Clause on two levels. First, it imposes a host of individual takings as the government forces one private party-the hospital-to transfer personal property to another private party-the patient. Here, violations are episodic, depending on whether the hospital is justly compensated. Second, EMTALA as a whole is an unconstitutional condition imposed on hospitals\u27 participation in Medicare. Although the government can properly attach strings to ensure public funds are spent as Congress intended, the government cannot with impunity require persons to waive fundamental constitutional rights as a condition for receiving a government benefit. This Article shows that, as EMTALA forces hospitals to abdicate their Fifth Amendment right against uncompensated takings, it exceeds the Supreme Court\u27s boundaries on federal spending. In the end, the mandate that hospitals care for emergency patients should remain, but hospitals must be justly compensated. Patients who can pay are of course legally obligated to do so, but for those who cannot or will not, the government must make good

How Financial and Reputational Incentives Can Be Used to Improve Medical Care

OBJECTIVES: Narrative review of the impact of pay‐for‐performance (P4P) and public reporting (PR) on health care outcomes, including spillover effects and impact on disparities. PRINCIPAL FINDINGS: The impact of P4P and PR is dependent on the underlying payment system (fee‐for‐service, salary, capitation) into which these schemes are introduced. Both have the potential to improve care, but they can also have substantial unintended consequences. Evidence from the behavioral economics literature suggests that individual physicians will vary in how they respond to incentives. We also discuss issues to be considered when including patient‐reported outcome measures (PROMs) or patient‐reported experience measures into P4P and PR schemes. CONCLUSION: We provide guidance to payers and policy makers on the design of P4P and PR programs so as to maximize their benefits and minimize their unintended consequences. These include involving clinicians in the design of the program, taking into account the payment system into which new incentives are introduced, designing the structure of reward programs to maximize the likelihood of intended outcomes and minimize the likelihood of unintended consequences, designing schemes that minimize the risk of increasing disparities, providing stability of incentives over some years, and including outcomes that are relevant to patients' priorities. In addition, because of the limitations of PR and P4P as effective interventions in their own right, it is important that they are combined with other policies and interventions intended to improve quality to maximize their likely impact