How to Control the Cost of Health Care

Without a doubt HC costs are high because providers are paid for what they do, not how effective the treatment is. Actually in some cases providers generate more revenue when they screw up and a patient has to be readmitted to a hospital. So what can be done differently? Paying for Outcomes:

Paying for Outcomes means encouraging hospitals, physicians and other provider groups to reduce potentially preventable events -- PPEs -- that harm patients and add costs. In other words, the approach rewards health care organizations that provide high-quality, effective care, and dings providers that deliver lower quality, less effective care.

There are five major types of PPEs – readmissions, admissions, complications such as infections, ER visits that lead to an inpatient admission, and outpatient procedures such as unnecessary imaging tests. The health law moves in the P-4-O direction by targeting hospitals with high rates of potentially preventable hospital readmissions. Beginning in 2012, these hospitals will need to adjust the quality of medicine.

http://www.kaiserhealthnews.org/Columns/2011/May/050911mcdonough.aspx