The healthcare system of the USA has been a subject of constant debates for many decades. It is notorious for being one of the most expensive healthcare systems in the world. According to statistics, US healthcare spending has reached a point of 3.2 trillion dollars (“National health expenditures,” 2015). At the same time, the country’s healthcare system remains notoriously inefficient due to exorbitant prices, differences in care quality depending on the region, access, and outcomes. Calls for reforms were made on both state and federal scales.
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Unlike with federal reforms, state healthcare reforms are easier to implement due to the smaller scale and the fact that the reform has to work within one system of regional policies rather than stretch out across the entire country and deal with differences in state laws and regulations. Most reforms target one of the several specific areas, such as the payment model, data collection, safety promotions, welfare programs, and others. The purpose of this paper is to review the healthcare reform strategy in New Jersey promoted by Horizon Healthcare Services.
As it stands, the American healthcare system operates on a fee-for-service payment system. This system has been around for many decades but has glaring inefficiencies. It prioritizes individual payments and the volume of spent resources over quality or results. Also, this system allows for malpractices and makes the providers interested in making the patients undergo unnecessary or downright harmful treatments to extract more money. Both healthcare providers and insurance companies have been experimenting with several systems that could potentially replace fee-for-service payments. These include reimbursements for quality treatment, bundled payments, managed care systems, global payments, and Accountable Care Organizations.
These new payment designs are being tested on several state levels, and are driving innovation in terms of healthcare payment and delivery systems. Although the degrees of success vary from one state to another, they provide valuable data for medical professionals and legislators and ensure that the overall health system is moving towards improved outcomes, affordable costs, and better access to healthcare.
New Jersey Horizon Healthcare Services
Horizon Healthcare Services is a private healthcare provider that implements an innovative payment system. It involves paying for episodes of care rather than individual services, which is a form of a bundled payment system. One particular fact about this reform strategy is that it was not brought upon due to federal waivers or state legislature passage. It is a private healthcare initiative that operates on a company budget. The program was launched in 2014, and since then Horizon Healthcare Services became one of the largest health providers operating under the “episodes of care” system.
The system saw significant performance improvements when compared to the collective value system it operated before the adoption of the payment reform. According to Martinez, King, and Cauchi (2016), Horizon Healthcare Services see a 6% increase in diabetes control, a 3% increase in cholesterol management, 3% higher rates in breast cancer screenings, and 8% increase in colorectal cancer tests. Besides, the reforms managed to reduce the overall costs of care by 9%, decrease hospital readmissions by 8%, and reduce the number of emergency room visits by 5%. These statistics prove that changes in payment systems have an effect not only on the prices for the end-users but also on the overall quality of care.
The experience of Horizon Healthcare Services in New Jersey shows that payment system reforms are possible even without the federal backing and state legislation, and can be easily promoted on a company level. With government support, bundle programs and similar healthcare reforms ought to show results that are even more impressive and improve the quality and availability of healthcare.
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Martinez, J.C., King, M.P., & Cauchi, R. (2016). Improving the healthcare system: Seven state strategies.