In a third-party payer system, providers have an incentive to maximize against the payment formulas. Guess what? Incentives matter!
Take this report on Health Management Associates, the nation’s 4th largest for-profit hospital chain, who maintained productivity quotas for physician employees –
According to the “60 Minutes” report, HMA hospitals pressure doctors to admit patients by setting admission quotas. Dr. Clifford Cloonan and Dr. Scott Rankin, two former employees of Carlisle Regional Medical Center, were among a handful of former HMA workers interviewed by Kroft, who said the company has a benchmark of 20 percent admissions for emergency room patients. Patients older than 65 have a 50 percent benchmark… “It has nothing to do with patient safety and patient care. It has everything to do with generating revenues,” Rankin said in the report.