Provider Behaviour and Payment Reform Research

Healthcare providers respond to financial incentives when setting service fees and volumes, and are assumed to balance patient welfare with the financial outcomes of their practice. In Australia, fees are largely unregulated and patients face a wide range of fee and service arrangements. We are using econometric techniques and qualitative research methods to explore provider’s behavioural responses to payment arrangements to identify intended and unintended consequences of reforms. We are exploring payments for cancer care, as well as learning from other conditions and treatments and reviewing the international literature on the design and implementation of value-based payments.

The problem: In 2010, Australian government removed MBS items from the public insurance benefit scheme. This reform aims to improve resource utilization by shifting attention away from low value care thereby enhancing value-based healthcare within Australia. While the main aim of the policy was to curtail government spending on the benefit system, it reduced the income streams of affected physicians.

Objectives: The main objective of this project is to examine the unintended impacts of the removal of an item from insurance benefit scheme on provider behaviour and patient welfare outcomes.

Data/Methods: We use the Sax Institute’s 45 and Up study of 260,000 residents living in New South Wales, Australia. We employ a difference-in-difference model to investigate the changes in provider behaviour and patient welfare. We measure provider behaviour using outcomes from billing practices, out-of-pocket costs, fees charged and benefits paid.

The problem: In this project, we focus on the changes and variation in how providers responded to new incentives in the treatment of cancer: the introduction of oral cancer therapies as an alternative to existing intravenous therapies. With the new therapies requiring less direct provider supervision, we anticipate changes in prescribing behaviour and associated provider service volumes and fee revenues.

Objectives: The project aims to examine changes in provider fee and service type/ volumes following the introduction of oral cancer therapies in 2015. These therapies involved less direct provider supervision compared to the existing therapies. We hypothesise that providers shifted the type, number and fees charged for services in order to stabilise their financial outcomes.

Data/Methods: We use administrative PBS claims data linked to 45 and Up Survey data to implement a quasi-experimental, difference-in-difference model. The model will compare the fees, service volumes and types delivered by providers whose patients moved onto the new oral therapies, to a range of plausible control groups (e.g. outcomes amongst providers whose patients remained on IV therapies).

The problem: Across the world, rising costs of cancer care have prompted the development of alternative payment models to fee-for-service, to improve quality and manage healthcare spending. Bundled payments have been implemented in several countries for an array of acute and chronic conditions, including cancer, demonstrating an overall positive impact on spending and quality, but the results can vary. Lessons from the successes and failures of bundled payments can assist in their wider implementation, but information regarding their characteristics, design and context are not always well described. Without clear reporting it is difficult to ascertain which bundles of care are effective for specific patient populations or providers.

Objectives: Review and summarise the current evidence of bundled payment models in cancer care and develop a checklist to inform optimal reporting of bundled payments to assist in transferability to other contexts, with particularly for the Australian setting.

Data/Methods: The literature review conducted by Nejati et al 2019, is being reviewed and repeated. We assess the quality of the articles is being assessed using the Cochrane Effective Practice and Organisation of Care Review Group (EPOC) data collection checklist. We are developing to help inform the optimal reporting of bundled payment arrangements.

Watch Phil Haywood’s webinar on this topic

The problem: In Australia, the value-based care agenda has focussed on reducing the use of ‘low-value’ interventions, redesigning models of care to improve coordination between providers, and increasing the use of patient-reported measures to drive improvement. To date, the crucial role of provider payments in supporting value has received limited attention. Yet the incentives within current payment models (e.g. fee-for-service, activity-based funding) are known to drive behaviours that run counter to the creation of value.

Objectives: This policy paper will provide an overview of the three main approaches to value-based payments: episode-based bundled payments, chronic condition bundled payments, and comprehensive population-based payments. It outlines the main issues in the design of these payment models, and explores the prospects for implementation in Australia.

Data/Methods: We draw on the international and Australian policy and academic literature on payment reforms and the value-based healthcare agenda.

Watch Jane Hall’s webinar on this topic