Assessing Medical Technologies (1985) / Chapter Skim
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5. Reimbursement and Technology Assessment
5. Reimbursement and Technology Assessment
Pages 211-227
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From page 211... ...
At first, when assessment was used largely to help make informed decisions about coverage of health care services by insurers and government, its application was only partially designed to control health care costs. But technology assessment now is seen as an aid to cost containment because it can help to determine relative cost-effectiveness of diagnostic and therapeutic procedures.
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From page 212... ...
If medical consultation appeared necessary, that agency presented its questions to a panel of physicians. If a decision ASSESSING MEDICAL TECHNOLOGY could not be reached by the panel, the matter was referred to the Public Health Service for further review.
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From page 213... ...
Similarly, the Interspecialty Medical Advisory Committee of Blue Shield of Massachusetts determines the general applicability of new medical technologies. The activities of the national Blue Cross and Blue Shield Association are a further example.
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From page 214... ...
Radical change in federal reimbursement policy has occurred through amendASSESSING MEDICAL TECHNOLOGY meets relating to Medicare. All of the above variables are touched by the new federal system, and responsibilities for some technology assessment as it may relate to the goal of cost containment as well as quality assurance for Medicare are written into the law.
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From page 215... ...
New Jersey's system began with hospital cost containment for Blue Cross and Medicaid (Finley, 1983) and was expanded to all payers including Medicare in 1978.
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From page 216... ...
Some states with prospective reimbursement systems for all payers have built-in limits on capital acquisition that may make prepurchase assessment for cost-effectiveness more necessary. New Jersey has a method different from the federal government's for adding a capital facilities allowASSESSING MEDICAL TECHNOLOGY ance to the DRG rate.
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From page 217... ...
By 1981 this program generated enough funds to maintain and expand a data base to test the cost-effectiveness of technologic innovation, and even to award 217 $500,000 in research grants to study the efficiency of certain therapeutic practices (Rochester Area Hospitals' Corporation, 1980, 1982~. Another example of a reimbursement incentive for using information from technology assessment is offered by the New jersey Hospital Rate-Setting Commission, which allowed a rate increase to a hospital that had been particularly effective in physician education, the goal of which was to alter expensive practices which were not of special benefit to patients.
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From page 218... ...
However the DRG system provides a strong fiscal incentive to slant diagnostic and procedure data ASSESSING MEDICAL TECHNOLOGY percutaneous transluminal coronary angioplasty has been assigned to a surgical DRG rather than a cardiac catheterization DRG and is therefore paid at a higher rate giving hospitals a bonus. Attention will need to be paid to these issues by HCFA and the Prospective Payment Assessment Commission (ProPAC)
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From page 219... ...
The New Jersey prospective payment demonstration had two components to influence physician practice behavior: (1) a hospital cost factor for specific implementation of prospective payment was allowed as an add-on to the DRG rate; in addition to perfecting their computer data management and upgrading medical records capabilities, hospitals could seek education costs to help doctors understand and use the DRG information; (2)
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From page 220... ...
to identify medically appropriate patterns of health resources use and to collect and assess information on medical and surgical services and procedures (including regional variations) "giving special attention to treatment patterns for conditions which appear to involve excessively costly or inappropriate services not adding ASSESSING MEDICAL TECHNOLOGY to the quality of care"; (2)
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From page 221... ...
Technology assessment does hold promise for containing costs while ensuring quality care for patients. Although the current federal reimbursement law potentially encourages the appropriate use of technology and could foster the accumulation of a useful data base, it can be improved further for technology assessment.
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From page 222... ...
Many authors and conferees have addressed the question of reimbursement for technology assessment. Chalmers proposed that the federal government and the private sector "set up an evaluating body to ASSESSING MEDICAL TECHNOLOGY organize and fund clinical trials." It is proposed they start with the most expensive procedures and decide which are worth paying for, traditional or not (Chalmers, 1982~.
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From page 223... ...
If the need for medical technology assessment couples so fully with the need for rational cost containment, a major policy issue is posed for lawmakers: Should reimbursement regulation be used to enforce scientific decisions about the safety, efficacy, and cost-effectiveness of technologies? The answer is not yet clear in law or .
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From page 224... ...
APPENDIX 5-A: LEGAL CONSIDERATIONS IN PRIVATE HEALTH INSURER'S IDENTIFICATION AND EXCLUSION OF UNNECESSARY, INCOMPETENT, AND UNPROVED SERVICES Proliferation of new medical and surgical procedures, devices, drugs, health care personnel, and facilities, and the related escalation in costs of care, have prompted public and private benefit programs to examine and reform their roles in the allocation of resources to health care. Longstanding public policy concern for protecting the ill from exploitation militates against providing health benefits for—and .
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From page 225... ...
Meaningful implementation of such an underwriting decision obviously depends heavily on the insurer's ability to identify and apply reasonable standards to distinguish effective care from that which is of uncertain or no value. Given the very high cost of much care and the prevalence of health benefits in one or another form, these insurer efforts toward more-efficient application of benefit funds can significantly affect both their beneficiaries' access to desired care and the marketplace success of various providers and producers of health technologies.
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From page 226... ...
Trenton: Hospital Research and Educational Trust of New Jersey. ASSESSING MEDICAL TECHNOLOGY Bunker, J
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From page 227... ...
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