"While I cannot find good data on the gamification of risk adjustment in provider-led ACOs, after talking to several providers nationwide, I know that this is happening."
I'll just observe that you've placed your finger directly on the pulse of the matter. What you're describing is extremely common across all dimensions of goods and services paid for by underwritten indemnification. There is a direct corollary in automotive collision repair and automotive warranty repair.
There will always be a hierarchy of diagnostic severity, based on causality. There are always incentives for overstatement and understatement, according to loss ratios and actuarial assessments.
The "Holy Grail" is always that most elusive of standards; objective performance criteria. Administrative bloat is the inevitable outcome of cost control initiatives, which fuels vertical integration and leads to moral hazard stemming from conflicts of interest.
Thank you for your fascinating expose of the coding and claiming structure. Please continue; the work is important to understanding how to strike a balance between loss ratio control and good faith indemnification.
I am convinced, Doctor, that what "ails" the current medical care delivery financing business model is systemic across many other "industries." One of the "wicked problems" (defined as those intractable problems, every solution to which presents another intractable problem,) is that aggressive billing practices impose an inflationary feedback loop.
But how to interrupt that feedback loop? Consolidation is happening across all sectors of business, and a private medical practice is a small business.
Your presentation is highly enlightening, demonstrating as it has, the commonalities between various drivers of consolidation. Behind those who meet client needs, is the billing practice and financial operations; the business office. The relief many physicians feel when first selling their practice to a corporate entity, is typically short-lived. The endless late nights poring over financials, ends. The doctors think that they will be able to focus solely on patient care.
And then the other shoe drops.
These noble practitioners rarely had personal experience of being subordinates, employees working at the whim and under the direction of someone able to terminate their employment, and soon realized that they were NOT "free to focus on patient care;" their professional judgement was subject to being over-ruled by administrative fiat. They had achieved a measure of work/life balance, but at the price of an indenture that constrained their best judgement.
You mention "expected cost," this is a commonality with other business models reliant on forecasting and reserve holdbacks. The "expectation" is presumed to be arrived at by honest actuarial calculations, but the calculation is arrived at by means of adjustments to the data, and therein lies the issue; spurious correlation and motivated reasoning are foundational to the priors, the algorithms by which the expected values are compiled. The statistical models are flawed, at best. More commonly, they are simply laden with distortions designed to suppress costs by means of incentives, most of which are perverse. It's the tyranny of metrics.
Every industry has its own language, its own way of defining terms. The words themselves are commonly used and understood, but their specialized application is not. Unless specialists such as yourself become "translators," people misinterpret the nuanced specialization of terms, and this results in what I refer to as "the Tower of Babel effect."
Thank you for taking the time to respond to my comment. I sincerely hope that you will continue to share your observations and analyses. Please don't think your efforts to be of minimal worth if your page views are initially low; as the corpus of knowledgeable presentation grows, it becomes a repository that can "go viral" without warning. This is an outcome most fervently to be desired.
I'm pleased to have found your 'stack, Doctor.
"While I cannot find good data on the gamification of risk adjustment in provider-led ACOs, after talking to several providers nationwide, I know that this is happening."
I'll just observe that you've placed your finger directly on the pulse of the matter. What you're describing is extremely common across all dimensions of goods and services paid for by underwritten indemnification. There is a direct corollary in automotive collision repair and automotive warranty repair.
There will always be a hierarchy of diagnostic severity, based on causality. There are always incentives for overstatement and understatement, according to loss ratios and actuarial assessments.
The "Holy Grail" is always that most elusive of standards; objective performance criteria. Administrative bloat is the inevitable outcome of cost control initiatives, which fuels vertical integration and leads to moral hazard stemming from conflicts of interest.
Thank you for your fascinating expose of the coding and claiming structure. Please continue; the work is important to understanding how to strike a balance between loss ratio control and good faith indemnification.
Ted,
Thank you for your thoughtful comment and comparison to other industries where this happens.
I am convinced, Doctor, that what "ails" the current medical care delivery financing business model is systemic across many other "industries." One of the "wicked problems" (defined as those intractable problems, every solution to which presents another intractable problem,) is that aggressive billing practices impose an inflationary feedback loop.
But how to interrupt that feedback loop? Consolidation is happening across all sectors of business, and a private medical practice is a small business.
Your presentation is highly enlightening, demonstrating as it has, the commonalities between various drivers of consolidation. Behind those who meet client needs, is the billing practice and financial operations; the business office. The relief many physicians feel when first selling their practice to a corporate entity, is typically short-lived. The endless late nights poring over financials, ends. The doctors think that they will be able to focus solely on patient care.
And then the other shoe drops.
These noble practitioners rarely had personal experience of being subordinates, employees working at the whim and under the direction of someone able to terminate their employment, and soon realized that they were NOT "free to focus on patient care;" their professional judgement was subject to being over-ruled by administrative fiat. They had achieved a measure of work/life balance, but at the price of an indenture that constrained their best judgement.
You mention "expected cost," this is a commonality with other business models reliant on forecasting and reserve holdbacks. The "expectation" is presumed to be arrived at by honest actuarial calculations, but the calculation is arrived at by means of adjustments to the data, and therein lies the issue; spurious correlation and motivated reasoning are foundational to the priors, the algorithms by which the expected values are compiled. The statistical models are flawed, at best. More commonly, they are simply laden with distortions designed to suppress costs by means of incentives, most of which are perverse. It's the tyranny of metrics.
Every industry has its own language, its own way of defining terms. The words themselves are commonly used and understood, but their specialized application is not. Unless specialists such as yourself become "translators," people misinterpret the nuanced specialization of terms, and this results in what I refer to as "the Tower of Babel effect."
Thank you for taking the time to respond to my comment. I sincerely hope that you will continue to share your observations and analyses. Please don't think your efforts to be of minimal worth if your page views are initially low; as the corpus of knowledgeable presentation grows, it becomes a repository that can "go viral" without warning. This is an outcome most fervently to be desired.