The patient-driven payment model: addressing perverse incentives, creating new ones

Area of Science:

• Health Economics
• Healthcare Policy
• Geriatric Care

Background:

• Medicare's previous payment system for skilled nursing facilities (SNFs) contained perverse incentives.
• These incentives potentially led to suboptimal patient care and resource allocation.

Purpose of the Study:

• To evaluate the Patient-Driven Payment Model (PDPM) as a successor to the previous Medicare SNF payment system.
• To identify and analyze the new incentives introduced by the PDPM and their potential implications.

Main Methods:

• Analysis of the incentive structures within the Patient-Driven Payment Model.
• Comparison of PDPM incentives with those of the prior Medicare payment system for SNFs.
• Qualitative assessment of potential problematic incentives in PDPM.

Main Results:

• The Patient-Driven Payment Model successfully addresses some perverse incentives of the prior Medicare SNF payment system.
• However, the PDPM introduces its own set of new incentives.
• These new incentives within the PDPM may present new challenges or problematic outcomes for SNF care.

Conclusions:

• While the Patient-Driven Payment Model represents an improvement over previous Medicare SNF payment systems, its new incentive structures require careful monitoring.
• Further research is necessary to fully understand the impact and potential unintended consequences of the PDPM's incentives on patient care and facility operations.