Texas State Health Plan: 1987-1988 Page: 60
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INTERVENTION ALTERNATIVES
The primary impetus for hospitals to develop
alternative delivery methods comes from incentives
created by benefit patterns and reimbursement
policies of the major third party payors--government
and commercial insurance--and the financial benefits
to be gainedfrom joint ventures.
Alternative 1: Structure third party reimburse-
ment programs to create financial incentives to
hospitals using and/or developing alternative
delivery methods.
In the past, few government or commercial financial
incentives existed to reward the use of ambulatory
care rather than traditional inpatient care by hospitals;
however, this is changing. Current financial pres-
sures to reduce surplus inpatient facilities and to
provide alternative ambulatory care resources are
causing appropriate changes in both benefit
structure and in reimbursement patterns. As
adequate financial support becomes available, an
expansion of ambulatory care activities by those
hospitals not already involved in such services can
be expected. An example of this effort is the Texas
Department of Human Services (TDHS) studies into
different forms of reimbursement for Medicaid.
Several alternatives are being examined including a
DRG-type format, a voucher system, and a capitation
plan. At least some of these programs will probably
move away from traditional patterns that pose
problems of fragmentation, and instead emphasize
primary care and well-organized referral
arrangements.
Insurance coverage influences both consumer
health care choices and attitudes.3 Health care
insurance programs need to place greater emphasis
on financial incentives in the purchasing system to re-
ward high quality care, conservative practice styles,
and efficient yet cost-effective health care provision
programs such as ambulatory care. This is occuring,
but more progress is warranted. The idea is to tie the
incentives to specific objectives where the provider
and purchaser can agree that progress is needed in
a given area, e.g., greater use of outpatient surgery
for certain procedures. Payment could be based on
actual progress. Such plans establish incentives for
the provider that could complement the incentives
already in place for insurance holders through their
benefitsdesign.4
Alterntive 2: Establish more joint venture arrange-
ments which provide alternative delivery methods.
There is an increasing incidence of joint venturing in
the health care industry among hospitals andbetween hospitals and physicians. Participants have
developed a wide range of new ventures outside of
the traditional hospitalframework.
Generally, the objectives among health care joint
venture parties are to: provide new sources of
capital, increase revenue, achieve economies of
scale, update technology, maintain current business
practices, reduce costs, share financial risks as well
as rewards, introduce new patient markets, improve
productivity, and provide management expertise.
Some of these programs, such as medical office
buildings and laundries, do not involve direct patient
care. Because joint venture arrangements are a
sharing of both risks and rewards, necessary
ingredients for success are trust, active interest, and
a strong business and moral commitment. If the joint
venture arrangement is between a hospital and
physician(s), the arrangement should be carefully
segregrated from other relationships between the
participants.5
ALTERNATIVE SELECTED
Financial incentives must be provided to encourage
hospitals to develop alternative delivery methods.
The accomplishment of this goal may be facilitated by
instituting each of the alternatives discussed.
Recommendations
1. Support and fund the Texas Department of
Human Services' studies of alternatives to the
present Medicaid system to develop a
reimbursement system which provides positive
financial incentives to encourage use of alterna-
tive outpatient services in lieu of hospitalization.
2. Continue to support health care programs which
facilitate the use of medically feasible alternative
delivery methods, through both individual and
corporate efforts of the insurance industry.
3. Encourage participation in joint ventures in
alternative delivery methods by hospitals and
other health care providers as appropriate
through efforts of the health care industry.
REFERENCES
1Peter Rogatz, M.D., "Directions of Health System
for New Decade," Hospitals, Vol. 54, No. 1, January
1, 1980, p. 68.
2Ken Peters, Senior Vice-President, Texas Hospital
Association, Austin, Texas, February 6, 1986,
personal interview.1987-88 TEXAS STATE HEALTH PLAN
60
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Texas. Statewide Health Coordinating Council. Texas State Health Plan: 1987-1988, report, 1986; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth1586615/m1/72/: accessed July 16, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.