Payment reform could mean more ethical care

Possible expanded role for bioethics

Many providers and health systems are unaware of the opportunity to leverage payment reform to develop or align community-based resources in order to provide better care and more support to patients post-discharge under the Patient Protection and Affordable Care Act (PPACA), according to James Corbett, JD, MDiv, a fellow at Harvard Medical School’s Division of Medical Ethics and Vice President of Community Health and Ethics at Steward Health Care System in Boston, MA. “They may not connect that payment reform presents a tremendous opportunity,” he says.

As payment reform leads providers away from the fee-for-service model to a model defined by global payment systems and sharing in patient cost reduction with insurers, providers and systems need to understand the community and the home as part of the continuum of care, stresses Corbett, and fully account for the social, behavioral, and environmental determinants of health. “Toward that end, at Steward, we are now sending pharmacists into the home of some of our most vulnerable patients to get a full sense of not just what the patient says they are taking, but also what their living conditions and medicine cabinets tell you. In the past, patients were told to go to the local pharmacy,” he says.

New opportunities

Care management is expanding outside the walls of the hospital and primary care office, says Corbett. “There is also a lot of activity around self-education and social support networks impact in disease management,” he says. “Our job extends beyond our walls, and much of that is driven by payment reform.”

Corbett says that patients who are discharged and live alone are one of the groups of patients at highest risk for readmission. “Is that a medical issue? Not if you think of medicine as narrowly defined, but the kind of thinking that our jobs stop at the point of discharge is a thing of the past,” says Corbett. Steward Health Care System is now rolling out a program to deliver healthy meals to prevent unhealthy eating from increasing the likelihood of avoidable readmissions in at-risk congestive heart failure patients, for instance.

“We knew that some patients are more likely to continue to eat high-sodium diets than others, which can lead to an avoidable readmission for heart failure patients,” says Corbett. “If I can prevent a readmission by delivering healthy meals to someone for a month, I can show how that is much more cost-effective than not hitting certain readmission targets.” This is the kind of program that couldn’t be fully funded previously, says Corbett, but moving from the fee-for-service model to global payments has changed that.

“Payment reform finally gives us the opportunity to do many things that folks always thought could be useful, but couldn’t be financially sustained in the past,” he says. “More and more providers are saying, ‘If I can avoid an avoidable readmission or unnecessary emergency room visit by doing these social-based initiatives, and if I can measure that and show the cost is cheaper than the hit you are going to take with a preventable readmission or unnecessary emergency room visit, then we can develop and sustain these types of programs.’”

Ethicists at the table

Ethicists need to get more involved with health care operations, argues Corbett. “Ethicists are often on the sidelines, if they are only addressing traditional ethics committee issues. I don’t want to discount that — it’s very important,” he says. “But I am concerned that the space for ethics committees, which are generally advisory in nature, is narrowing, and that this could limit the impact of ethicists.”

Ethicists need to understand the ethical implications of health care finance and the importance of operational ethics, advises Corbett. “No longer can we say that the ethicist’s chief domain is in the ethics committees alone,” he says. “That is far away from where the policies and protocols are being developed that impact patient care. Let’s get ethicists at the table where these decisions are made, including the C-suite.”

For this to occur, however, ethicists are going to need some skills that haven’t traditionally been considered as part of their domain, says Corbett. “As payment reform and accountable care organizations change our way of thinking, the role of ethicists had better change with it,” he argues. While payment reform provides a powerful opportunity for better patient care, there are still some inherent risks to vulnerable patients that ethicists need to be able to understand and proactively prevent, explains Corbett. “Ethicists are a powerful backstop against unethical care, but they’ve got to become accustomed to broadening their traditional role,” he says. (See related story, below, on financial incentives.)


  • James Corbett, JD, MDiv, Division of Medical Ethics, Harvard Medical School, Steward Health Care System LLC, Boston, MA. Phone: (617) 419-4735. E-mail:

Financial incentives present opportunity

There are currently 328 accountable care organizations (ACOs), up from 164 in 2001, according to a 2012 report from Oliver Wyman, a New York-based company that consults with health care institutions looking to set up ACOs.

“ACOs are surging. This is a new way of providing care that is going to continue to expand across the country and will help us to reshape the type of care we are giving,” says James Corbett, JD, MDiv, a fellow at Harvard Medical School’s Division of Medical Ethics and Vice President of Community Health and Ethics at Steward Health Care System in Boston, MA. “The challenge now in health care is that we are on fee-for-service for some people, and risk contracts for others. It is an exciting time as we move toward more preventative care, but we are not fully there yet.”

Physicians and systems providing care need to understand this new terrain of collaboration and alignment, stresses Corbett. “This is a dramatic change for hospitals. Those that were holding out hope that they wouldn’t have to go in this direction are going to have to fall in line, and quickly,” he says.

In addition to payment reform and ACOs, hospitals also have other financial incentives to avoid discharging patients too quickly, such as avoiding Centers for Medicare & Medicaid (CMS) penalties for avoidable readmissions that occur within 30 days. “Systems will no longer get paid for discharging patients too quickly. Patients being on their own once they leave the hospitals will become a thing of the past quite soon,” Corbett says. Instead, systems will have to figure out how to keep patients in the hospital long enough so that they are not readmitted, while at the same time ensuring that there are social support networks and other resources in place in the community that will support the patient post-discharge. “Hospitals won’t thrive without doing that well,” says Corbett.

Payment reform and CMS penalties for avoidable readmissions present an opportunity for providers to provide a different type of post-acute supportive care, which could be better both for the patient and the bottom line, he says.

“Even if the hospitals aren’t getting paid for a certain initiative, there may be value in it. If it helps prevent a re-admission on a non-fee-for-service insurance model, there is an inherent cost savings there,” Corbett says. “As you can imagine, the incentive to reduce readmission leads to more coordinated care outside the hospital, along with better outcomes for the patient, which is why many hospitals are honing in on it.”