• Industry: Healthcare
  • Type: Survey report
  • Date: 5/21/2013

Focus on outcomes 

Focus on outcomes
With funding under pressure and a lack of formal quality measures, many payers are striving to obtain the lowest price for care. Raising quality can bring down costs, although an upfront investment is required. However, attempts to merely cut costs may actually reduce quality. The overriding trend in healthcare is towards value – defined as outcomes divided by costs – so long term care providers need to be incentivized accordingly.

Regulators will be scrutinizing payments to ensure that any savings by insurance companies, government or other payers are not at the expense of quality. Providers will therefore be expected to be open about all their costs, with outcomes carefully monitored.

“The whole ‘personal budgets’ approach can be difficult to communicate as it is hard to make people accept that care recipients will make sensible decisions about what is important to them.”

Carolyn Denne, Head of Service Quality Social Care Institute for Excellence, UK

In a number of countries, users have been given personal budgets in an attempt to increase their level of control and to personalize care. Some recipients – notably the very frail elderly – are less in favor of direct payments, due to the confusing array of choices and the administration. This approach can also lead to misuse or abuse, as individuals and families attempt to procure cash that will be used for other purposes; the use of vouchers can help reduce such a risk.

A report by the Health Foundation states that there is currently limited data showing whether direct payments improved quality, as most of the available research is descriptive rather than empirical, with a lack of conclusive data on the impact on health outcomes, quality and cost effectiveness.

In the US, Medicaid Cash and Counseling programs allow homebound, disabled patients to manage their own budgets and choose services that meet their needs. And in the Netherlands, citizens pay 12.15 percent of taxable earnings (up to a specified limit) into a fund that is used to purchase services (including residential care) for people with severe physical and mental disabilities.


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