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Sound Health is a recurring series that airs twice each month on WGLT's Sound Ideas program.Support for Sound Health comes from Carle Health, bringing care, coverage, support, healthcare research and education to central Illinois and beyond.

Sound Health: Health Care Compensation Models Continue To Shift Slowly

Colleen Kannaday
Carle BroMenn President Colleen Kannaday.

The national conversation about medical compensation has been going on for years. The goal is to transition to a model where revenue comes more from keeping people healthy than from fee-for-procedures in treating specific illnesses. That transition is not complete, but some changes have come.

"We're all well aware that the percent that individuals, as well as businesses and the government, spend on health care is problematic and we have to find a way to provide care at a lower cost," said Carle BroMenn President Colleen Kannaday.

In a new episode of Sound Health, Kannaday said there are some new revenue models that share money saved by preventive care.

"Really, it has been the various individual contracts that the physicians participate in that has been willing to provide additional reimbursement for wellness and screening versus simply reimbursing physicians or even hospitals for treating patients solely when they are sick," Kannaday said.

Most medical providers, including hospitals, still get the bulk of their revenue from fees for procedures. That will become more problematic as the baby boom generation ages.

Hospitals and doctors face increasing pressure to contain costs as Medicare provides an increased portion of total reimbursement to providers. Medicare and Medicaid reimbursement may not cover all the costs of delivering that care.

Remaining challenges in transitioning to a preventive care model include measuring cost savings from wellness efforts and sharing those savings among the various medical providers.

"There's a lot of work being done on a national level with the federal government, continuing to look at innovative models of care and trying to figure out incentives and the levers that can be pulled to focus on wellness and prevention because we know that is much more cost effective than simply treating people when they're sick," said Kannaday.

For instance, Medicare has a shared savings model to calculate savings bonuses at year end and send them back to hospitals. But that leaves hospitals uncertain as they try to anticipate the bonus as they budget through the year.

Cost containment enters in another guise, an effort to make the sometimes bewilderingly complex health care marketplace more transparent. Starting last January, the federal government began requiring medical providers to publish a list of several hundred procedures and prices associated with them.

Many hospitals also created an online price transparency tool. Carle BroMenn is one of them. It hasn't helped reduce confusion as much as you might think. People are using it to price shop. But, for instance, Kannaday said some areas such as the sleep center tend to reach out in person.

"We certainly see more individuals calling. I think it's because of the complexity of having to enter your information and many individuals don't understand their insurance coverage and what that means: if they have met their deductible or what their out-of-pocket is, or whether it's a covered service under their insurance plan," said Kannaday.

She said one of the keys to reducing costs is to make sure people can access care when they want to get in. Delays can increase costs, and not just when people put off mammograms and colonoscopies.

"As we look at achieving optimal wellness, the behavioral health area is a significant opportunity as we look at whole health," said Kannaday.

Kannaday said behavioral health also is a cost center. She said hospitals and systems such as Carle continue to invest in recruiting new psychiatrists, growing their in-patient behavioral health units, adding recovery and offering those services.

Kannaday said medical providers will continue to struggle to offer the greatest value for the patient at the lowest cost.

WGLT Senior Reporter Charlie Schlenker has spent more than three award-winning decades in radio. He lives in Normal with his family.