Payment & Delivery

How insurers and providers are organized and paid to deliver care. Research by LDI Senior Fellows examines the shift from fee-for-service payments to newer models of paying for and delivering value, such as Accountable Care Organizations and Patient-Centered Medical Homes.

Penn’s Gant Family Precision Medicine Consortium Takes on Sustainable Targeted Oncology

Sep. 20, 2018

Biomedical advances in genomics and oncology, combined with rising costs for targeted cancer therapies, challenge the way we currently deliver and pay for cancer care. To foster the economic sustainability of targeted therapies, the University of Pennsylvania convened the Gant Family Precision Cancer Medicine Consortium, a multidisciplinary work group of experts from health care economics, policy, law, regulation, biomedical research, patient advocacy, and the pharmaceutical and insurance industry.

Developing a Standard Handoff Process for Operating Room-to-ICU Transitions: Multidisciplinary Clinician Perspectives from the Handoffs and Transitions in Critical Care (HATRICC) Study

Sep. 5, 2018

Meghan B. Lane-Fall, Jose L. Pascual, Scott Massa, Meredith L. Collard, Hannah G. Peifer, Laura J. Di Taranti, Megan Linehan, Lee A. Fleisher...

Abstract [from journal]

Background: Operating room (OR)–to-ICU handoffs place patients at risk for preventable harm. Numerous studies have described standardized handoff procedures following cardiac surgery, but no existing literature describes a general OR-to-ICU handoff system.

Methods: As part of the Handoffs and Transitions in Critical Care (

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Association of Hospital Participation in a Medicare Bundled Payment Program With Volume and Case Mix of Lower Extremity Joint Replacement Episodes

Sep. 5, 2018

Abstract [from journal]

Importance: Medicare’s Bundled Payments for Care Improvement (BPCI) initiative for lower extremity joint replacement (LEJR) surgery has been associated with a reduction in episode spending and stable-to-improved quality. However, BPCI may create unintended effects by prompting participating hospitals to increase the overall volume of episodes paid for by Medicare, which could potentially eliminate program-related savings or prompt them to shift case mix to lower-risk patients.

Objective: To evaluate...

Debating Medicaid Rules for Mental Health Care

Aug. 10, 2018

In a recent Scattergood Foundation report, LDI Senior Fellow Dominic Sisti and I tackle the curious case of the “institutions for mental diseases” (IMD) exclusion in Medicaid. For non-elderly adults, the national IMD exclusion prevents Medicaid from paying for inpatient care in institutions with more than 16 beds that primarily provide care for persons with “mental diseases” other than dementia or intellectual disabilities.

Hospitals, Skilled Nursing Facilities, and Bundled Payment

Aug. 10, 2018

The Centers for Medicare and Medicaid Services has rolled out a number of bundled payment programs in the hopes that they will help to control costs and improve coordination and quality of care. A focus of these programs is the care delivered by skilled nursing facilities (SNFs) – a post-acute care setting that currently accounts for a significant portion of cost variation and spending in Medicare.

Differential Pricing of Pharmaceuticals: Theory, Evidence and Emerging Issues

Aug. 9, 2018

Abstract [from journal]

Differential pricing—manufacturers varying prices for on-patent pharmaceuticals across markets—can, in theory, lead to increased patient access and improved research and development (R&D) incentives compared with charging a uniform price across markets. Theoretical models of price discrimination and Ramsey pricing support differentials based inversely on price elasticities, which are plausibly related to average per capita income. However, these models do not address absolute price levels and dynamic efficiency. Value-based differential pricing theory...

Effect of Hospital and Post-Acute Care Provider Participation in Accountable Care Organizations on Patient Outcomes and Medicare Spending

Aug. 9, 2018

Divyansh Agarwal and Rachel M. Werner

Abstract [from journal]

Objective: To test for differences in patient outcomes when hospital and post‐acute care (PAC) providers participate in accountable care organizations (ACOs).

Data/Setting: Using Medicare claims, we examined changes in readmission, Medicare spending, and length of stay among patients admitted to ACO‐participating hospitals and PAC providers.

Design: We compared changes in outcomes

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Heart Failure Home Management Challenges and Reasons for Readmission: a Qualitative Study to Understand the Patient's Perspective

Aug. 2, 2018

Jonathan Sevilla-Cazes, Faraz S. Ahmad, Kathryn H. Bowles, Anne Jaskowiak, Tom Gallagher, Lee R. Goldberg, Shreya Kangovi,...

ABSTRACT [FROM JOURNAL]

Background: Heart failure patients have high 30-day hospital readmission rates. Interventions designed to prevent readmissions have had mixed success. Understanding heart failure home management through the patient’s experience may reframe the readmission “problem” and, ultimately, inform alternative strategies.

Objective: To understand patient and caregiver challenges to heart failure home management and perceived reasons for readmission.

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Burns Calls BS on CVS-Aetna Merger

Jul. 23, 2018

[Editor's note: on August 1, 2018, California Insurance Commissioner Dave Jones recommended that the United States Department of Justice sue to block the proposed merger.]

The proposed $69 billion merger of CVS and Aetna drew sharp criticism in a June California Insurance Commission hearing, including from LDI Senior Fellow Lawton R.  Burns, PhD, MBA, Professor of Health Care Management in the Wharton School.

Redesigning Provider Payment: Opportunities and Challenges from the Hawaii Experience

Jul. 18, 2018

Kevin G. Volpp, Amol Navathe, Emily Oshima Lee, Mark Mugishii, Andrea B. Troxel, Kristen Caldarella, Amanda Hodlofski, Susannah Bernheim, Elizabeth Drye...

ABSTRACT [FROM JOURNAL]

Objectives: To describe the process of developing a new physician payment system based on value and transitioning away from a fee-for-service payment system

Study Design: Descriptive. This paper describes a recent initiative involving redesign of primary care provider payment in the State of Hawaii. While there has been extensive discussion about switching payment from volume to value in recent years, much of this change has happened at the

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Physician Perspectives In Year 1 Of MACRA And Its Merit-Based Payment System: A National Survey

Jul. 11, 2018

ABSTRACT [from journal]

We surveyed a national sample of internal medicine physicians in March–May 2017 to explore their beliefs about the newly implemented Merit-based Incentive Payment System (MIPS). Respondents believed that their efforts in the four focus areas identified in the survey would ultimately improve the value of care. When informed that those areas represented the four MIPS domains, the majority remained positive about the likely impact on value. However, expectations varied by physicians’ characteristics and sense of control over the desired outcomes, and many...

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