Many individuals imagine that the US is a fee-for-service system and plenty of European international locations are extra possible to make use of international capitation reimbursement for suppliers. Those that dislike fee-for-service declare it incentivize over-treatment and disincentives prevention and use phrases like “waste” and “too costly”. Those that dislike international capitation declare that strategy results in lowered entry to care and longer wait occasions for care and phrases used embrace “rationing” and “queuing”. Nevertheless, the U.S. is dipping its toe in experimenting with international capitation.
One instance of worldwide capitation cost within the US is the Pennsylvania Rural Well being Mannequin (PARHM). How does this system work? A latest paper by Scanlon et al. (2022) explains:
The Pennsylvania Rural Well being Mannequin is a $25 million, 6-year demonstration funded by the Heart for Medicare and Medicaid Innovation (CMMI). Finally, the mannequin will take a look at whether or not international funds for the healthcare wants of a inhabitants will result in care supply transformation and improved high quality of care and decrease prices for rural Pennsylvanians.
Below the worldwide cost, contributors obtain the historic internet affected person income for inpatient and outpatient hospital providers for every taking part payer. A part of the curiosity in international capitation was Maryland’s adoption of a world finances mannequin for 10 of its rural hospitals in 2010. This technique changed the earlier fee-for-service primarily based system.
A report evaluating the primary 12 months of this system explains the mannequin in additional element. PARM is multi-payer initiative, which incorporates participation from Medicare, business payers, business payers’ Medicaid managed care and Medicare Benefit plans.
Which hospitals have joined this system?
On the time of the Mannequin announcement (2017), 67 rural hospitals, together with 15 [critical access hospitals] CAHs, had been eligible to take part within the Mannequin. 5 hospitals joined the Mannequin for PY1 (2019), eight further hospitals joined the Mannequin for PY2 (2020), and 5 extra hospitals joined the Mannequin for PY3 (2021). So far, all contributors stay the Mannequin for PY3 (2021). Collaborating business payers embrace 4 Pennsylvania-based payers and one nationwide insurer.
How had been the hospitals doing earlier than PARHM was carried out and the way are they doing afterwards?
The short- and long-term monetary viability of the Cohort 1 hospitals worsened in the course of the baseline interval [i.e., prior to PARHM]—a possible motivating issue for his or her participation within the PARHM. Declining inpatient quantity and glued prices could have negatively impacted monetary efficiency in the course of the baseline interval…
[After the adoption of PARHM] Biweekly funds beneath the worldwide finances addresses variability in funds resulting from seasonality and quantity shifts. Hospitals perceived this as an essential Mannequin function. Throughout PY1 (2019), previous to ultimate reconciliation of Medicare reimbursements, interim international finances funds exceeded the interim Medicare reimbursement quantity the Cohort 1 hospitals would have been paid beneath FFS and cost-based reimbursement strategies.
Briefly rural hospitals seem like a bit higher off financially beneath PARHM. It is going to be fascinating to see how PARHM operated in a extra dynamic setting of the COVID-19 pandemic, the place prices and utilization are a lot more durable to foretell beneath a pandemic. On the one hand, international capitation could present hospitals monetary stability from shedding income from elective surgical procedures which had been deferred; then again, it’s unclear if PARHM–with out different monetary help–would have supplied sufficient compensation to help COVID-19 pandemic associated actions.
