Of­fer in­cen­tives for bet­ter out­comes, not more provider ser­vices

Give in­cen­tives for im­proved health out­comes, not vol­ume of ser­vices

Modern Healthcare - - NEWS -

Most Amer­i­cans know that health­care is too ex­pen­sive, and that we should get bet­ter value for our money. In fact, we spend twice as much on health­care as other na­tions while get­ting about the same re­sults.

Work­ing to stop ris­ing costs—while con­tin­u­ing to im­prove qual­ity—should be a na­tional pri­or­ity. And it has been for those of us in the pri­vate sec­tor who have been work­ing to trans­form our sys­tem long be­fore the health­care re­form law passed.

Un­for­tu­nately, there are still bar­ri­ers to progress.

For ex­am­ple, Medi­care to­day pays hos­pi­tals a fee for each ser­vice they per­form, re­gard­less of whether it helps a pa­tient. This means that a hospi­tal that pre­vents an in­fec­tion gets paid less than one that al­lows a pa­tient to de­velop an in­fec­tion dur­ing his or her hos­pi­tal­iza­tion.

That’s right—a great hospi­tal that uses the most ef­fec­tive treat­ments can end up earn­ing less than a hospi­tal with sloppy prac­tices that lead to avoid­able in­fec­tions. More­over, pri­vate in­sur­ers have some­times been stymied in ef­forts to al­ter th­ese in­cen­tives.

That’s ex­actly the kind of back­ward in­cen­tive that wors­ens health prob­lems, drives up prices and leaves pa­tients dis­sat­is­fied. In any other busi­ness, it would be ab­surd to pay the worst per­form­ers more and the best per­form­ers less, but that’s ex­actly what we do in health­care.

For­tu­nately, the pri­vate sec­tor is now de­vel­op­ing new and ef­fec­tive ways to over­come th­ese up­side-down in­cen­tives—and we’re al­ready de­liv­er­ing bet­ter re­sults.

In Hawaii, the lo­cal Blue Cross and Blue Shield plan is part­ner­ing with hos­pi­tals and Pre­mier on an ini­tia­tive that ties re­im­burse­ment di­rectly to cost and qual­ity out­comes. As part of this pro­gram, hos­pi­tals are chal­lenged to elim­i­nate avoid­able deaths, pre­vent read­mis­sions and re­duce hospi­tal costs. In ad­di­tion, hos­pi­tals must pro­vide all rec­om­mended treat­ments, pre­vent in­fec­tions and in­juries, and en­sure a pos­i­tive ex­pe­ri­ence.

Hos­pi­tals that meet the goals are el­i­gi­ble for bonuses. Those that don’t risk a 15% pay­ment penalty. No more pay­ment for bad out­comes.

Other col­lab­o­ra­tions among med­i­cal pro­fes­sion­als and in­sur­ers are ex­plor­ing new ways of de­liv­er­ing the best pos­si­ble care to the cus­tomers—and pa­tients—that we share. In New Jersey, Hori­zon Blue Cross and Blue Shield and health sys­tem At­lantiCare are work­ing to change the typ­i­cal us-vs.-them dy­namic be­tween providers and in­sur­ers by shar­ing goals, risks and in­vest­ments in care im­prove­ments. Af­ter all, it’s best for ev­ery­one when peo­ple are health­ier.

This model holds At­lantiCare ac­count­able for the health of its pa­tients. It is the op­po­site of the sta­tus quo, which cur­rently en­cour­ages a greater vol­ume of med­i­cal care.

In­stead, At­lantiCare and Hori­zon Blue Cross and Blue Shield suc­ceed by keep­ing peo­ple healthy and out of the hospi­tal. Pro­gres­sive pay­ments al­low At­lantiCare to hire care man­agers to bet­ter pro­vide care at home and in the ap­pro­pri­ate set­tings based on a pa­tient’s con­di­tion and needs. And the in­surer and At­lantiCare share the ben­e­fit from sav­ings gen­er­ated through greater effi- cien­cies and bet­ter re­sults for pa­tients.

The end re­sult is win-win-win—first for the pa­tients in New Jersey, but also for the in­surer and the health­care provider. In this case, New Jersey res­i­dents get fewer ill­nesses, care that is co­or­di­nated to fit their health needs and fewer stays in ex­pen­sive hos­pi­tals. Hori­zon shares rev­enue in or­der to en­cour­age At­lantiCare to in­vest in so­lu­tions that will cut ex­penses over the long term. And At­lantiCare gives up some rev­enue it would oth­er­wise get from ad­mis­sions in ex­change for sav­ings that come from a health­ier pop­u­la­tion that is less ex­pen­sive to care for.

Each of th­ese cre­ative ap­proaches started and ex­panded in the pri­vate sec­tor. Work­ing to­gether, doc­tors, nurses, hos­pi­tals and in­sur­ers are mak­ing changes to health­care in Amer­ica, cut­ting costs and mak­ing fam­i­lies health­ier at the same time.

That’s what our cus­tomers—and all Amer­i­cans—de­serve.

Scott Serota is pres­i­dent and CEO of the Blue Cross and Blue Shield As­so­ci­a­tion. Su­san DeVore is pres­i­dent and CEO of the Pre­mier health­care al­liance, Char­lotte, N.C.

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