Outcome-based payments have cost-saving potential

A New York Times article also published in the Arkansas Democrat-gazette discussed a slowdown in the growth of health spending. Before 2009, health-care spending invariably rose at 3 or 4 times the rate of inflation. But in 2009 and 2010, costs increased by only 4 percent and remained flat at 18 percent of our gross domestic product.

Experts suggest that the major reasons for the decline are the recent recession, job losses and fewer Americans with health insurance. With fewer Americans having access to health care, doctor visits declined, fewer tests were done and the number of people seeking care for minor problems in emergency rooms decreased.

Because many Americans are worried about job security, fewer are willing to take time off for elective surgical procedures. Insurance plans with lower premiums — but higher deductibles and copays — have led consumers to think twice before seeing a physician or agreeing to expensive care. In the past few years, the number of workers with high-deductible insurance has increased from 3 percent in 2006 to 13 percent in 2011.

But it is encouraging to note that the slowdown in the rate of health-care inflation cannot be explained solely by more uninsured Americans having less access to care. There is compelling evidence that health-care providers are being much more prudent in ordering tests, performing procedures or prescribing the most expensive medications. And simultaneously, healthcare consumers appear to be taking a more active role in their health care and are beginning to discuss costs, rationale and the necessity of treatment plans recommended by their physicians.

As the Affordable Care Act becomes a reality, Medicare and Medicaid, as well as private insurance plans, are shifting payment to what is referred to as “accountable care” where physicians are paid for quality rather than the quantity of care delivered.

This approach will alter the way medicine is practiced and is designed to not only save money but also improve quality of care by focusing on prevention, better coordination of care, avoiding unnecessary care and doing everything possible to keep patients as healthy as possible and away from emergency rooms and hospitals.

Throughout the nation, partnerships among government and private insurers, primary-care physicians, specialists and hospitals are being forged into “accountable-care organizations.” In the past, our health-care system rewarded high-technology acute care at the expense of managing and preventing chronic diseases.

In a true paradigm shift, more attention now will be paid to coordinating the care of patients with multiple chronic diseases, assuring compliance with medication, careful and appropriate monitoring of the response to treatment, and preventing complications and aggravation of illnesses.

The goal is maintaining health and avoiding the need for hospitalizations. This care will involve close partnerships among physicians, physician assistants, nurses, pharmacists, social workers, dietitians and rehabilitation experts. These teams will have incentives to practice the right care and reduce costs while being monitored to assure that quality of care benefits the overall health of their patients. Quality will be measured by how appropriately patients are managed, the frequency of complications, the number of visits to the emergency room and admissions to the hospital.

In the future, our goal must be for every American to have access to inexpensive and rational health care. Whatever the Supreme Court decides about the constitutionality of the Affordable Care Act, the writing is on the wall for everyone involved in health care. The end is in sight for those who believe that the fancier the test, the more expensive the drug and the newer the technology, the better the health-care facility.

Those institutions that continue to tout the newest and best equipment and the best possible resources for every acute-care problem are looking backward and not paying to attention to our critical future needs. We must prevent disease, identify serious illnesses early, treat them cheaply and effectively, refer to specialists and perform high-technology tests only when truly needed and do everything we can to avoid admissions to the hospital.

As America grows older, this approach will be the only way in which we as a nation will be able to cope. And because retiring baby boomers are rapidly expanding the Medicare population, hospitals and specialists will have plenty of business even if the number of tests and procedures done on individual patients is drastically curtailed.