"What can be done to realign economic and bureaucratic incentives to help reduce costs and overmedicalization?"

It's Time to End the Incentives to 'Overmedicalize'

By Stuart Butler

"What can be done to realign economic and bureaucratic incentives to help reduce costs and overmedicalization? It's not easy but some strategies are promising.

One approach is counter-incentives to induce more sensible patterns of behavior. An example of this is the hospital "readmission penalty," included in the Affordable Care Act,which works like this: For certain medical conditions, such as heart attacks or pneumonia, if a hospital discharges a Medicare patient and that patient is readmitted to any hospital within 30 days, then the discharging hospital is essentially fined by Medicare. That makes hospitals focus on what happens outside their walls, not just within them. Indeed, the penalty is beginning to push many hospitals to explore ways they can help improve the recovery of discharged patients by working with housing and social services, and increasingly with community-based organizations so that there is patient follow up."