The feds prepare the next phase in their transformation of the health care industry with the release of proposed new Prospective Payment System (PPS) rules published May 4th in the Federal Register (I found the proposed rule using the Justia search engine mentioned yesterday). The Home Care Automation Report reports:

CMS has done no more or less than what [NAHC's Bill] Dombi had been warning the
industry it would do almost since the inception of the Home Health
Prospective Payment System (HH PPS) in October, 2000. After permitting
home care providers seven years to fully learn the system, enjoy
reasonable profit margins and invest in efficiency tools such as
technology and training, CMS is beginning to ratchet payment rates
downward, exactly as was done with hospital DRGs in the 80's.

I spent some time looking at remote monitoring and home health care delivery several years ago. The vast majority of home health care agencies were not interested in adopting point of care technology that was not reimbursed, regardless of how much it might improve productivity and lower costs. From my occasional exposure to this market since, that attitude has not changed much. It would seem that in the near term, home health agencies will have little choice:

For CY2008, Medicare's proposed solution is to force home care
providers to cut costs. By ratcheting payments down, only those who
find ways to economize will survive.

Perhaps downward reimbursement rate pressures will spur technology adoption that will reduce the cost of care delivery - like remote monitors that cut down on required caregiver home visits - without CMS reimbursing for the actual use of the technology.

In a more, ahem, rational market, providers would be constantly innovating to reduce costs in light of capitated reimbursement. In fact some industries are quite adept at reformulating themselves in response to changing markets. To all of our frustration, health care is not one of those flexible and constantly changing industries. While the science of medicine is always innovating, the business of delivering health care has a strong aversion to change.

Pictured right are some of the ViTel Net home monitoring devices, shot at last summer's Healthcare Unbound conference in Boston.