Tuesday, May 22, 2012

Degree of challenge and risk

This is a follow-up to my April 12 post in which I summarized aspects of a conference held by the MA Health Data Consortium about possible changes in payment regimes for doctors and hospitals.  The materials from that meeting have now been published and are available here.

I copy one slide for your consideration from Robert Glavin's presentation.  He presents the degree of difficulty and the risk associated with movement from a fee for service payment regime to more bundled types of approaches.  I think it is an excellent depiction of the issue and offer it for your consideration.  I also highly recommend that you take a look at Charlie Baker's comments from the conference.


e-Patient Dave said...

This is a totally uninformed innocent question - as you know, my sphere is patient engagement, not finance - so don't hit me:

Is it really so difficult to find SOME way to stop costing 50% more per capita than other countries?

Again, I don't know enough for that to be snarky - my question is exactly what it says.

Or is the problem that to get THERE, we have to start from where we ARE?

Barry Carol said...

Paul –

I’m pleased to see both you and Charlie Baker endorse the need for good price and quality transparency tools in healthcare. I suspect that a lot of money could be saved if appropriate and necessary care were delivered by the most cost-effective high quality providers rather than those with the most local or regional market power. Where are the regulators on this and where is the resistance coming from? With non-profit insurers controlling all or almost all of the health insurance market in Massachusetts it should actually be easier to legislate or require disclosure of actual contract reimbursement rates in MA than in states where for profit insurers are more dominant. No?

I’ll bet that most doctors don’t have any idea how much less expensive imaging is at non-hospital owned imaging centers than at hospitals or how much cheaper some generic drugs are than their brand name equivalents. The big dollars though are in hospital charges, both inpatient and outpatient. I think price and quality transparency tools could work wonders in the hospital sector by either steering more patients to the more cost-effective facilities or forcing the high cost hospital systems to lower their rates. Patients who insist on going to the more expensive hospitals for comparable quality care to that offered by lower cost competitors should pay something extra for the privilege and it should be enough to get their attention.

Anonymous said...

Barry, I had the same thoughts as you (mostly, they have been stimulated by you!), but if Charlie Baker's statistics are true regarding 90% of the $$ spent being used by 10% of the population, mostly the chronically ill, then I think we are into a population who is ill-equpped to choose care on the basis of cost. I think the major benefit of the changes you advocate is, as you state, public pressure on both the providers and the insurers who pander to them to bring their charges more in line.


Barry Carol said...

Nonlocal –

I think Charlie Baker may be too high on his estimate that 10% of patients account for 90% of costs. I remember seeing some data from CMS, I think, a few years back that showed that in any given year, the most expensive 5% of Medicare beneficiaries accounted for 41% of costs. Moreover, if you looked cumulatively over a five year period, the most expensive 5% of beneficiaries only accounted for 27% of costs because some died along the way while others had a significant event one year like a CABG or a hip replacement and then recovered. In the commercially insured population, insurers have told me in the past that the most expensive 10% of members account for 60%-65% of healthcare costs.

For the dual eligibles, I think intensive case management has a lot of potential to reduce costs and improve care coordination. Remember that many in this group include nursing home residents and people with significant chronic conditions like CHF and ESRD. If a CHF patient winds up in the hospital several times a year, it would presumably be less expensive if he or she did not wind up in a facility like MGH or B&W. Even FFS Medicare pays some hospitals including AMC’s more than others. It’s always better from a healthcare system cost standpoint if as much care as possible takes place in the most cost-effective high quality setting.