State level review by local providers purchasers and

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State-level review by local providers, purchasers, and business organizations Didn’t slow expenditure and investment growth; protected incumbents Quality Problems Quality Chasm- need to incentivize systems of care to improve focus on quality Pay for Performance In 2008, Medicare stopped paying for “hospital acquired conditions” (HAC) Only affects payment if patient had no other complications ACA Medicare Payment Changes Reduced hospital payment updates Value-based payments (DRG payments adjusted for quality performance, 1-2%) Expanded penalty for higher rates of HAC (1% reduction if in top 25%) Reduction of payments based on ratios of payments for preventable readmissions to total payments Nonprofit Hospitals Tax exemptions Governed by trustees who don’t have equity in firm Official goals stated in mission statement Delivering community benefits, help the needy, etc What are nonprofit hospitals maximizing? Trustees: Community welfare; care for poor; perks Admin: Empire building; higher salaries and bonuses Patients: Lower prices; higher quality; more services Physician Staff: Higher quality; higher salary; predictable work hours Why do nonprofit and for-profit hospitals coexist? Very little difference in services, staff, etc. Nonprofits solve asymmetric info problem There is no asymmetry between patients and hospital, but rather between patients and physicians Indicate to patients they’re more caring, not here for your money No evidence nonprofits provide higher quality or higher prices
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Few tell on website they’re nonprofit For-profits don’t change name because the name has already built a reputation Justify tax status?? Exempt from property, sales, and income taxes Used to be justified by bargain between hospitals and community that a hospital would treat patients who were unable to pay and gov’t would grant a tax exemption to hospital Community benefits include uncompensated care (charity care + bad debt), Medicare/aid shortfalls, community programs No way to value community benefits Number of ER visits has increased as number of ERs has declined Not profitable, required to treat emergencies Under ACA, in order to maintain exempt status, nonprofit will have to follow new requirements A mandated community health needs assessment Written financial assistance and emergency care policies Limitations on patient charges (no more than would charge someone with ins) Requirements regarding billing and collections practices Universal Healthcare Coverage and Nonprofits Concept of universal coverage rules out free care provision to uninsured people, as, by definition, insurance coverage is universal Raises broader issue of role of nonprofits in providing benefits to their communities under universal coverage Diminished need to use tax exemptions to facilitate delivery of care to poor weakens retional for granting tax exemptions to nonprofits Physicians
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