Cut the Cost of Health Care: All Hands on Deck

Our $3 trillion U.S. health-care budget is set to expand with health spending projected to double over the next 10 years. This staggering increases leads to nervous consumers worried over the future costs associated with care.

Even health experts say that bending the curve of rising health costs is indeed monumental and the current payment system of fee for service creates a problem because we are not paying for quality.

Thankfully, these same experts are working diligently to develop solutions to fix health-care payment system and bring value into the equation. “You can’t talk about reforming how we pay without talking about how we deliver,” says Suzanne Delbanco, executive director of Catalyst for Payment Reform, a non-profit that works with large employers on health-care cost issues.

CPR embraces the Institute of Medicine’s six guiding principles: Safe, timely, effective, efficient, equitable and patient-centered care. Attention to these values can help move us as a nation to the desired result: “short-term improvement; long-term change,” Delbanco says.

First Order of Business

As patients, we will certainly reap the fruits of their labor but are also an important part of the equation.

“The first order of business is getting people to take responsibility for their health when they are not in the doctor’s office, says Adam Bosworth, CEO and founder of keas.”  To do this, people must be given the tools they need.

In 2009, Bosworth, former director of Google Health, took his passion for developing health solutions and struck out on his own. “I’d spent 25 years building Lego blocks for adults,” says Bosworth. “I wanted to spend the next 25 doing something my mom, who had been diagnosed with ovarian cancer, could understand.”

The Keas business model provides for the structure of partnerships between Keas and pharmaceutical companies and Keas and employers to develop care plans for people who suffer with certain diseases or conditions, are managing a condition by using a specific drug, or just want to take the right steps to stay well.

Keas provides out-of-the box care plans which can be customized, if a client company prefers, to its own need. Last year, Keas established a partnership with Pfizer (NYSE:PFE) illustrating  Bosworth’s belief that pharma is a good target  market for his services because the industry is incented to establish funded innovative programs.

And many employers are pushing innovation to their benefits plans. Numerous employers have set up health programs for employees and their families realizing that healthy lifestyles lead to improved health habits, enhanced employee morale and greater productivity.

Team Work for a Shared Purpose

Bosworth acknowledges he’s learned a good deal since his company’s inception. For one thing: to achieve employee engagement an activity must be fun. He’s also learned people are responsive and committed to a goal when, much like the premise of Facebook, they have a shared purpose and an esprit de corps.

With this in mind, care plans often employ a team approach with a spirit of competition and support. They tend to play, in a positive way, on a person’s fear of censure for failing his or her team or the desire for praise. And it seems to be working. A recent participant, according to Bosworth,  “blogged that she ‘had walked 8,000 steps while preparing Thanksgiving dinner.’ That’s huge.”

Bosworth adds that the experts who provide content for Keas plans can leverage the platform to publish out their knowledge. “The point is not for them to be IT guys, just to be smart.”

Closer to Care

Heralding group approaches like Keas, Dr. Molly Joel Coye, UCLA’s chief innovation officer, says that just getting groups of patients with similar conditions together helps. Experts cannot attest to the full extent of their impact, but empirical evidence suggests that people are using these programs.

Increasingly, technology can bring people closer to their own care, Coye says. Some employers now provide an Internet-based service to provide real-time information about the cost of a particular test or procedure and the patients’ out of pocket expenses. “Though in the early stages, experts expect rapid growth [of this trend] as the need for information and transparency increases,” she says.

Coye also sees technology as a means to avoid unnecessary or duplicative testing or procedures. With the increased usage of electronic health records, a physician treating a patient in one facility will have access to a centralized repository that will list when and what tests the patient has already undergone elsewhere, avoiding duplication.

Guidelines for Provider Choices

Technology will also allow providers to have more access to best practice information and judge their practices by that benchmark. This also allows a patient to ask a physician, “What is best practice?” giving the patient opportunity to evaluate and make choices.

Similarly, Delbanco says that her company is seeking input from multiple stakeholders, including, providers, health plans, employers, brokers, and consumer group to develop a coordinated agenda for the large purchasers of care.

Requests for Proposal may now be structured with questions that will better illuminate what employers need in payment reform. Included will be questions that explore how much of a plan’s payment for service is tied to quality of care or how well providers follow best practice guidelines and track physician outcomes.

Already some fixes

Because of the reform bill and even before, government-run programs like Medicare and Medicaid have introduced approaches to fix some common issues like denial of provider reimbursement for preventable hospital readmissions, or the use of multi-stakeholder groups to determine fees for medical services in lieu of just physicians.

Delbanco says that procedures like hip and knee surgeries or colonoscopies are now being scrutinized through a reference price system that assumes quality is equal in frequently done procedures but compares provider cost which can vary greatly region-to-region or even within the same city or region.

Disincentivizing providers by altering health-care reimbursement is another tack. For example, paying for hospitals stays episodically as opposed to per day; or reimbursing two procedures at the same fee. Paying the same reimbursement for an uncomplicated c-section and a normal delivery could help reduce the number of more complicated, riskier, costlier procedures, Delbanco says.

“Standardizing ways to measure delivery and getting this meaningful information to consumers will help enable people to make health decisions for themselves.”