By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Health Works CollectiveHealth Works CollectiveHealth Works Collective
  • Health
    • Mental Health
    Health
    Healthcare organizations are operating on slimmer profit margins than ever. One report in August showed that they are even lower than the beginning of the…
    Show More
    Top News
    stress management for healthcare workers
    3 Tips For Healthcare Professionals: How To Stay Beautiful, Healthy, and Happy
    November 2, 2021
    importance of relaxing on the weekend for your health
    Importance of Relaxing During the Weekend for Optimal Health
    March 25, 2022
    LASIK Eye Surgery
    What Is LASIK Eye Surgery?
    May 16, 2022
    Latest News
    7 Most Common Healthcare Accreditation Programs: Which Should You Use?
    August 20, 2025
    Hospital Pest Control and the Fight Against Superbugs
    August 20, 2025
    Hygiene Beyond The Clinic: Attention To Overlooked Non-Clinical Spaces
    August 13, 2025
    5 Steps to a Promising Career as a Healthcare Administrator
    August 3, 2025
  • Policy and Law
    • Global Healthcare
    • Medical Ethics
    Policy and Law
    Get the latest updates about Insurance policies and Laws in the Healthcare industry for different geographical locations.
    Show More
    Top News
    All That You Need to Know About Clenbuterol
    November 22, 2019
    Top 5 Facts About CPPA Accreditation
    April 9, 2015
    mental health benefits school
    Mental Health & Practical Benefits of Continuing Education After 30
    June 30, 2024
    Latest News
    How Social Security Disability Shapes Access to Care and Everyday Health
    August 22, 2025
    How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
    August 22, 2025
    How One Fall Can Lead to a Long Road of Medical Complications
    August 22, 2025
    How IT and Marketing Teams Can Collaborate to Protect Patient Trust
    July 17, 2025
  • Medical Innovations
  • News
  • Wellness
  • Tech
Search
© 2023 HealthWorks Collective. All Rights Reserved.
Reading: 8 Performance Programs That Will Change Healthcare
Share
Notification Show More
Font ResizerAa
Health Works CollectiveHealth Works Collective
Font ResizerAa
Search
Follow US
  • About
  • Contact
  • Privacy
© 2023 HealthWorks Collective. All Rights Reserved.
Health Works Collective > Business > Finance > 8 Performance Programs That Will Change Healthcare
BusinesseHealthFinanceHospital AdministrationPolicy & Law

8 Performance Programs That Will Change Healthcare

tkilpatrick
tkilpatrick
Share
7 Min Read
healthcare performance programs
SHARE

healthcare performance programsThe most significant opportunity to improve health outcomes and reduce costs in the United States may come from developing performance programs that redefine healthcare services.  In 2 to 3 years, we will have insight into the potential impact they offer our future health and healthcare costs.

healthcare performance programsThe most significant opportunity to improve health outcomes and reduce costs in the United States may come from developing performance programs that redefine healthcare services.  In 2 to 3 years, we will have insight into the potential impact they offer our future health and healthcare costs.

The way hospitals, physicians and other health providers get paid today is based on the number of services performed (like most other services).  Unless we decide we want to pay for services we don’t use, this will not change.  What we can change is how we define “the service”.

The hospital visit, the physician office visit and the outpatient procedure are services that will be redefined by new reimbursement models called “performance programs”. In the future, the top line revenue of hospitals, physicians and other health providers will remain tied to volume, yet their bottom line profitability will be based on “performance programs” at a competitive price. This may bring the desired improvement of health outcomes at a reduced cost.

More Read

nursing program
7 Tips to Picking the Best Nursing Program
New Technology Could Become Best Defense for Fighting Infection
Telehealth and the Internet of Things
Concierge medicine 90210
The Doctor Will Skype You Now: Changing How We Go to the Doctor

Here are 8 major “performance programs” being developed and piloted that will reshape the United States healthcare system:

Readmission Penalties – Medicare penalizes hospitals as much as 2% of their total inpatient Medicare revenue if there is a high rate of readmissions within 30 days after a patient leaves the hospital.  Medicare will increase the maximum to 3% beginning October 2014.  It is likely that other insurers will eventually tie a percentage of reimbursement to readmissions rates.

Spending Per Beneficiary – Medicare will begin penalizing up to 0.3% of inpatient Medicare revenue beginning October 2014 based on the average “Medicare Spending Per Beneficiary”.  Medicare spends an average of $10,122 per inpatient stay and $7,984 during the 1 to 30 days after the patient leaves the hospital. This new metric is publically available and will likely be adopted by other insurers.

Reference Pricing – If you are in an ambulance with symptoms of pneumonia or heart failure, it is unlikely you’ll be checking hospital performance and pricing.  In the future, this will not be the case for most scheduled (day or two in advance) orthopedic surgeries (i.e., hip and knee replacement), heart surgeries and other procedures.  California Public Employees’ Retirement System (Calpers) discovered it paid between $20,000 and $120,000 for the same hip or knee replacement procedures across the state, without differences in outcomes. Calpers capped their patient’s benefits at $30,000 for these procedures and saved $3.1M. 54 hospitals in California were able to offer these procedures to the 1.3 million Calpers beneficiaries at a price under $30K.

Bundled Payments – Medicare spends an average of $10,122 for an inpatient stay and approximately $10,000 during the period of 1 to 90 days after the stay. This could mean as much as 50% of the reimbursement will be tied to what happens outside the four walls of the hospital. The Medicare Bundled Payment for Care Improvement (BPCI) pilot of this model has begun and could be rolled out by October 2015. Many other insurers are leveraging the Medicare rules and regulations to introduce commercial bundled payments.

Accountable Care Organizations (ACOs) – ACOs take on the risk of the overall cost of a patient measured over 12 month periods. Over 250 ACOs have signed up for the three year Medicare pilot called Medicare Shared Savings Program (MSSP).   The private healthcare insurance industry has followed Medicare’s lead and guidelines by signing up 250 ACOs to similar arrangements for their enrollee’s 12 month costs.  Already 14% of the US population is being served by ACOs. Medicare is likely to offer Beneficiary financial incentives to join ACOs beginning in 2015. Insurers will likely follow by offering similar incentives to their members.

Patient Centered Medical Homes (PCMHs) – These are mostly primary care practices that get NCQA certified to coordinate patient care that leads to higher quality, lower cost and a better overall patient experience. PCMHs get payment for coordinating care and performing population health services that are not typically reimbursed to traditional practices.  PCMHs are also eligible for higher payments, lump sum payments, per-member per-month payments, pay-for performance payments and shared shaving payments.

Employee Population Health – The typical hospital or healthcare system is one of the largest local employers. Most of them are self-insured and responsible for the overall cost of their employees’ healthcare. Like other large employers, hospitals offer employee financial incentives that encourage them to take health assessments and adhere to a health plan to improve certain conditions.  Large employers like Walmart offer employees’ discounts (or no out of pocket costs) if employees get services from hospitals that employers have negotiated directly for services.

Health Plans – 20% of hospitals or healthcare systems now offer some kind of insurance product to their communities and another 20% are exploring insurance options.  Narrow network insurance plans are also being developed to be offered in the new Affordable Care Act healthcare exchanges.

Performance programs are new and will evolve based on their efficiency and effectiveness.  Hospitals, physicians and other health providers will need to transform to the new definition of the “service”.  It will be a service with a performance program component.

(healthcare programs / shutterstock)

Share This Article
Facebook Copy Link Print
Share

Stay Connected

1.5kFollowersLike
4.5kFollowersFollow
2.8kFollowersPin
136kSubscribersSubscribe

Latest News

engineer fitting prosthetic arm
How Social Security Disability Shapes Access to Care and Everyday Health
Health care
August 20, 2025
a woman explaining the document
How a DUI Lawyer Can Help When Your Future Health Feels Uncertain
Public Health
August 20, 2025
physiotherapist at work
How One Fall Can Lead to a Long Road of Medical Complications
Health care
August 20, 2025
Common Healthcare Accreditation Programs
7 Most Common Healthcare Accreditation Programs: Which Should You Use?
Health News
August 20, 2025

You Might also Like

ACA Individual Mandate Provision: Day 2 of Deliberations

March 27, 2012
pediatrics
Health care

7 Strategies To Help Children Feel More Comfortable During Doctor Visits

July 22, 2019

Update on Health Information Exchange

February 8, 2012
Challenges Hospitals Face in 2015
BusinessHospital Administration

5 Challenges Hospitals Face in 2015

December 12, 2014
Subscribe
Subscribe to our newsletter to get our newest articles instantly!
Follow US
© 2008-2025 HealthWorks Collective. All Rights Reserved.
  • About
  • Contact
  • Privacy
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?