Health Care Finance Group HFMA Issues Reform Plan

The Healthcare Financial Management Association says the nation’s health care system blocks its health care goals and creates financial instability by adding cost and complexity.

The organization, which is holding its 2008 ANI Healthcare Financial Conference in Las Vegas this week, unveiled a plan to reform the nation’s health care payment system in the first of a series of reports called “Healthcare Payment Reform: From Principles to Action."

The report says the health care systems’ biggest flaw is that it rewards high-cost practices and inadequately rewards wellness, efficiency and high quality care. One structural problem is the failure to define the cost of training future physicians. That forces hospitals and health systems that provide graduate level education to build the cost of training into rates negotiated with private payers.

The report also said the facilities, technology and innovation needed to sustain quality health care requires providers to generate a margin on revenues. That however, is difficult when some payers don’t pay the full cost of care.

HFMA contends that to restructure the system, reformers need to focus on quality, fairness and simplicity. Richard Clarke, HFMA president and chief executive, said the report was developed with the collaboration of consumers, providers, payers and employers, and that the HFMA stands ready to support the plan’s key principles that are necessary to reform the system.

“This consensus presents an important opportunity to take action on this complex and critical reform,” he said in a press release. However, tradeoffs will be necessary to accommodate the specific concerns of the various interest groups, he said.

For example, the payment system should encourage and reward high-quality care and discourage medical errors and inefficient care. It also should reward healthful behavioral choices and simplify the payment process, the report says.

The HFMA report acknowledges that changing payment incentives to reward high-quality outcomes could unintentionally add cost.

“Any change to solve one aspect of the system holds the potential to make some other worse,” the HFMA reported. But the organization pledged to lead efforts to focus discussion around those areas that need resolution.

“Ensuring that these efforts are within the context of shared goals for the nation’s health should foster the collaboration necessary for meaningful change,” according to the report.