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Thoughts on the battle for healthcare's soul

Updated: Jun 30

4sight Health’s recent article by David W. Johnson titled “Site-Neutral Payment and the Battle Healthcare's Soul” raises critical health policy issues that have been ignored for far too long. David is critical of the American Hospital Association’s (AHA) attacks on site-neutral payments. He observes “saving money by eliminating irrational pricing variation [like drug reimbursement by delivery location] is elemental to good policy creation.”

AHA’s CEO Rick Pollock's strong resistance to this policy logic lack’s credibility. AHA should be offering constructive reforms to Medicare payments instead of fighting a rational change to policy. The real issue for hospitals is that Medicare Reimbursement Payments, at 82% of hospital costs, are woefully inadequate. However, Congress and taxpayers cannot afford to increase hospital funding - there is no money. 

AHA should be offering Congress new reimbursement models to pay providers more fairly and innovatively. For example, Medicare’s use of an insanely complex coding system to determine payments for healthcare has created a one trillion dollar annual billing expense that offers no benefit to patients and taxpayers. The administrative burden created by this coding system for billing encourages waste, fraud and has demoralized health care caregivers. 

There are alternatives to simplify payments that will increase quality outcomes and lower cost. Target two areas that represent the core of healthcare delivery: primary care and end-of-life care. These are low cost care models that should not be paid for with a complex coding system. 

An insurance driven system of payment reform using reasonable salaries and cost reimbursement for these care areas would lower costs and improve quality. For more details supporting these recommendations go to my website

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