Now We’re Covered… But at What Cost?

Why we need to change the way we perceive and practice medicine.

I had an interesting conversation with a colleague the other day. We were lamenting about our respective sports injuries. He was about to have knee surgery. Coincidentally, his golden retriever tore her ACL and was also scheduled for surgery. He was complaining about the costs for the dog’s surgery. He described how he had shopped for 2 to 3 different veterinary surgeons based on costs and reputation. He had been quoted prices ranging from $1,600 to $2,800. There were also a variety of different approaches that could be used to repair the dog's ACL.  After much contemplation, he selected a surgeon based upon a pretty thorough cost/benefit analysis.

I proceeded to ask him how much it would cost to repair the torn ligaments in his own knee. His response was, “I haven’t a clue.” I then asked how he picked his orthopedic surgeon. He said his primary care physician referred him to a surgeon in his network, so there wouldn’t be any reimbursement issues.

I found it interesting to note that my colleague spent more time researching – and knew more about the costs and quality of his dog’s surgery – than his own.  After talking with him, it got me thinking more broadly about consumer healthcare decision making.

I’ve concluded that until consumers are motivated to undertake this type of evaluation regarding their own healthcare consumption, all the healthcare reform legislation in the world will not impact the slope of the healthcare spending curve in this country.

I believe there are three criteria under which this plan can be evaluated to determine the potential for the new law to actually control costs.

1.) PATIENT INCENTIVES

Patient incentives can take a variety of forms and can be sponsored by several different healthcare stakeholders. The purpose of any of these incentives would be to either modify patient behavior toward health prevention or create motivation for patients to become more prudent purchasers of healthcare services. In either circumstance, financial incentives would work best. Cash is king here. From incenting employees or health plan members to complete Health Risk Assessments (HRA’s), to charging employees who smoke higher insurance premiums, the concept of value-based benefit design has to become the standard for health plans and employers. Particularly in the area of chronic care, some large employer groups are already seeing convincing results by using benefit plan incentives (reduction in co-pays from the standard plan for chronic disease medications) to reduce direct medical costs.

2.) CARE COORDINATION

In a previous issue of FUSE, you’ve heard me discuss the benefits of the Patient-Centered Medical Home (PCMH). There are several PCMH pilots underway across the country producing lower medical costs while simultaneously producing better outcomes. Why does the PCMH appear to work? First and foremost, there is a single physician in charge of all aspects of the patients' care, reducing the fragmentation that occurs, particularly for the most seriously ill and costly patients. Typically, the coordination of care in these systems is supported by an IT infrastructure with an Electronic Medical Record System (EMRS) in operation. The EMRS often contains patient portal features which facilitate communication between doctors and patients outside of the treatment room. This, in turn, fosters a more shared decision-making relationship between doctor and patient. Finally, all PCMH stakeholders have reimbursement and payment structures that motivate health care practitioners to operate in the best interest of the patient.

3.) PROVIDER PAYMENT REFORM

As long as the vast majority of healthcare practitioners in this country get paid only when they do things to you, then they will keep doing things to you that satisfy their conscious or subliminal need to advance their financial position. Know any people who have voluntarily given themselves a pay cut lately? I liken our current Fee for Service (FFS) provider payment system to the financial services industry. If doctors or brokers aren’t creating transactions with your body or money, they don’t get paid. I’d be the first in line to reward a physician or broker for achieving a desired health outcome or financial goal. However, what I don’t want to keep doing is paying them the same reward whether or not they win or lose. While pay-for-performance provider payment systems are slowly gaining penetration, if I had to bet on any single change to the system that would have the greatest impact on controlling healthcare costs, it would be this. I guess I’d throw in a little tort reform with this as well. God forbid, some day when we don’t have a White House or Congress full of lawyers we can move tort reform forward.

So, how well does the new healthcare reform law stack up against my criteria? Not very well I’m afraid. As Americans we can all take pride in the fact that the new legislation expanded the insured population, thereby establishing healthcare as a right as opposed to a privilege. However, from a cost-containment perspective, the bill has a lot going against it. Essentially budget cuts and new and increased taxes are being used to finance expanded coverage. The Congressional Budget Office (CBO) estimates, with numerous caveats, that the new law will reduce budget deficits in future decades.

My math tends to be a bit more simplistic. When demand, created by bringing more people into the health care system, is not sufficiently balanced by an increase in the supply of those services (providers), prices will invariably increase. Also, when you build more widgets on an inefficient assembly line, all you get are greater numbers of inefficiently produced widgets. Government imposed budget cuts (limiting the growth of Medicare payments, cutting payments to private Medicare Advantage Plans, etc.) and taxes (higher Medicare taxes, excise taxes on high-premium insurance plans, etc.) are the artificial solution designed to circumvent basic economic facts.

However, I’m from Massachusetts and I’ve seen the future…

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For nearly 15 years InfoMedics has worked on behalf of pharmaceutical marketers to break down walls in health communications by enabling doctors and patients to communicate between office visits. The elegance of our technique is its ability to gauge the complete patient experience, as it happens in real practice. Our methodology is rooted in behavioral science; our tools are patient feedback platforms delivered through advanced technology.

Years of our proven approach show that when the patient experience is translated into terms doctors understand, doctors make more informed choices and patients experience better care. In fact, we recently surveyed more than 3,000 physicians who enrolled patients in our programs across a variety of therapeutic areas and 93 percent of them said our patient feedback reports provided new information about their patient and his/her treatment. Eighty-seven percent said they included the reports in their patients' personal files and 92 percent said they would consider discussing the report with the patient.

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