Based on experience with payment for Medicare post-acute care services, Judy Feder argues that a shared-risk-and-savings approach to these services may be the best strategy for promoting Medicare's efficiency without undermining quality and access to care. Medicare already bundles skilled-nursing-facility (SNF) services into "days," and home-health-agency (HHA) services into "episodes." These bundles have generated high and varied profits that appear to have far more to do with skimping on care and avoiding costly patients than with efficiency in care delivery. In a service area with weak patient classification mechanisms and quality norms, a payment approach in which savings and risk are shared - a hybrid of a fee-for-service system and one providing rewards for spending reductions - will achieve a better balance of cost, quality, and access than a system of single bundled payments, at least until our capacity to measure patients' care needs and outcomes is sufficiently robust.
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