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A risk-based prospective payment system that integrates patient, hospital and national costs.

C Siegel¹, K Jones, E Laska

¹Nathan Kline Institute, Orangeburg, NY 10962.

Journal of Health Economics

|April 8, 1992

Summary

This summary is machine-generated.

This study proposes a new prospective payment model for inpatient care, balancing hospital and patient costs to incentivize efficiency and access. Historical Medicare data for psychiatric patients informed the model.

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Area of Science:

Health Economics
Healthcare Payment Models
Inpatient Care Reimbursement

Background:

Prospective payment systems are crucial for managing healthcare costs.
Balancing provider reimbursement with patient access is a key challenge in healthcare policy.
Existing models may not adequately account for patient-specific financial risk.

Purpose of the Study:

To propose and evaluate a novel prospective payment model for inpatient care.
To design a payment system that incentivizes both cost efficiency and patient access.
To determine optimal parameters for a hybrid payment model using historical cost data.

Main Methods:

Developed a prospective payment model combining hospital average cost with patient and national average costs.
Utilized mean squared error loss minimization to determine payment coefficients.
Applied the model to historical Medicare data for psychiatric inpatients.

Main Results:

The proposed payment model incorporates efficiency and access incentives.
A coefficient for individual patient costs acts as a hospital-specific financial risk measure.
Higher reimbursements for high-cost, high-risk patients were demonstrated, promoting access.

Conclusions:

The suggested prospective payment model offers a balanced approach to inpatient care reimbursement.
This model can enhance financial risk assessment and improve patient access to care.
Historical cost data provides a viable method for estimating payment parameters in healthcare.