Outcome-based payment: a new beginning?

Although the trend toward case-mix reimbursement is a step in the right direction, it is an inadequate means of enhancing the quality of long-term care and optimizing cost-effectiveness. What is needed is a payment system that creates positive incentives for a facility to help patients improve or at least to slow their deterioration as much as possible. In calculating reimbursement, such a system must focus on outcomes actually achieved rather than on services rendered. Recent studies indicate that the status of long-term care patients (as measured by such indexes as activities of daily living and cognitive functioning) can usually be reliably predicted over intervals of approximately three months' duration. Using such predictions as standards, long-term care facilities can be financially rewarded or penalized according to whether their patients fare better or worse than expected. This emphasis on outcomes would encourage greater flexibility and creativity in approaches to care, while focusing attention where it belongs--on residents' quality of life.