Incentives for Efficient Health Care Delivery
In the Sunday, December 28, 2008, New York Times, professor Alain Enthoven has a cogent op-ed piece entitled “Health Care With a Few Bucks Left Over.”
In his piece is a compelling argument that our current health care system, neither the patients nor the providers are rewarded for cost-effective, high-quality health care. He believes strongly that giving more provider choices to health insurance plan participants, particularly large, efficient multispecialty group practices, would significantly reduce health care costs.
While I may not agree with his conclusion that the employer-based health care system, combined with the current tax system, are the root causes of the health care system’s inefficiency, I think he is right about the flaws of the fee-for-service system for doctors and hospitals. I also think that he is directionally right about the fact that most employers and insurers do not reward patients for taking better care of themselves to avoid using the health care system, and most do not provide incentives for adhering to the right disease treatment program.That is why I like the proposals made by Dr. Elliot Fisher of Dartmouth for integrated accountable care organizations in a community that are judged by both cost efficiency and population health metrics, and that realize savings for both the providers in the organization and the plan participants if health care is delivered at lower cost and high quality.
What he argues, and what I believe as well, is that we must align the system from top to bottom around healthy behaviors and high-quality care.
A great model for an integrated primary care organization is the corporate clinical offering of QuadMed, an affiliate of the Quad Graphics company, a commercial printing operation based just outside of Milwaukee founded and operated by the Quadracci family. http://www.quadmedical.com/
QuadMed, which started as an on-site primary clinical care service to Quad Graphics employees 18 years ago, has expanded to include service to dependents, retirees, and even some third-party businesses.
Unlike a typical corporate clinic, which focuses on occupational medicine, and a little bit of urgent care, Quad Med is a full-service primary care operation which provides internal medicine, pediatrics, obstetrics and gynecology, ophthmology, and even behavioral health care. It also has an onsite dental clinic, a pharmacy, a test laboratory, a rehabilitation center incorporated into its onsite fitness center, and an administrative services operation.
It has a combination of salaried staff health care professionals who are rewarded for patient satisfaction, adherence to evidence-based medicine standards, and optimal productivity (which targets spending a sufficient amount of time with patients to uncover the full range of issues), and separate private practice physicians who share facilities and back-office services. It manages an electronic health record system using eClinicalWorks software http://www.eclinicalworks.com/.
Like Pitney Bowes, QuadMed has wellness incentives built into its basic employee health plan, but it goes further by having differential total out-of-pocket costs for those with chronic diseases who adhere strictly to disease treatment programs. As a result, QuadMed performs significantly better than benchmarks in terms of lower rates of health care cost increase, and its performance approximates the savings levels to which Alain Enthoven refers.
In essence, this is a real-life example of what Enthoven hopes to put into place nationally. There is no question that some percentage of the employers who provide health coverage for employees do so in an unenlightened manner, but the answer is not to scrap the system. It is to point employers toward the right model, and incent them for offering it.
Today, the employer gets a tax deduction whether it has a sensible or ill-conceived model of health insurance and health care delivery. The employer which eliminates employee choice, has a poor-quality provider network, and has the poorest-quality insurance plans gets the same deduction as a firm like QuadMed or Pitney Bowes, that works hard to deliver health and high-quality health care to employees. That is wrong.
We have great models for what works to deliver high-quality, lower-cost care. Let’s make them more broadly-based.
