Reducing spending and improving quality of care

Actuaries at the Centers for Medicare and Medicaid Services (CMS) report health care spending will increase 6.1 percent next year as the Affordable Care Act expands insurance coverage to more Americans, and will then grow by an average of 6.2 percent a year over the next decade. These estimates, although a bit lower than average annual increases from 2000 to 2009, sound an alarm that health care will remain a large and growing share of the overall U.S. economy for years to come. The latest CMS projections find health spending will total $3.1 trillion next year and increase to $5 trillion by 2022, accounting for one-fifth of the nation’s gross domestic product.

In previous blogs I focused on creating a culture of health through wellness and prevention, and revitalizing and growing primary care as two key actions necessary to achieve truly sustainable health care reform and help reduce the medical cost trend. Today I want to focus on two other key actions – payment reform and greater alignment of the health care system.

The Institute of Medicine (IOM) recently issued a critical report, saying the cancer-care system in the U.S. is fraught with waste, skewed financial incentives and misinformation about how to provide the best care to the 1.6 million Americans diagnosed with cancer each year. Saying the cancer-care system is “increasingly chaotic and costly,” the report also said “oncology care is an extreme example of the best and worst in the health care system today – highly innovative targeted diagnostics and therapeutics alongside escalating costs that do not consistently relate to the value of treatments, tremendous waste and inefficiencies due to poor coordination of care and lack of adherence to evidence-based guidelines with frequent use of ineffective or inappropriate treatments.”

The IOM offered recommendations for improvement, including a focus on efforts to improve affordability by reforming payment and eliminating waste, encouraging patient-centered medical care, shifting to team-based models of care and communicating more effectively with patients.

IOM recommendations apply to cancer care and overall health care in the U.S., and undoubtedly sound familiar to the recommendations of Alliance of Community Health Plan (ACHP) members.

A recent ACHP report, “Moving Beyond Fee-for-Service: A Path to Payment Reform from Community Health Plans,” features seven ACHP member plans – including Independent Health – who have changed the way they pay many of their participating physicians. While member plans have taken different approaches, we have in common a focus on primary care, recognition of the importance of linking payment to meaningful quality measures and involving physicians in the design and implementation of new models.

By rewarding physicians and providers for quality outcomes, rather than quantity of services provided, we can significantly change the way health care is delivered, improving quality and lowering cost trends.

Meanwhile, The Commonwealth Fund has released findings indicating there is a wide disparity in access to affordable, quality health care based on where you live, especially among low-income populations. According to the report, if all states could reach benchmarks set by leading states, an estimated 86,000 fewer people would die prematurely each year and tens of millions more adults and children would receive timely preventive care.

Titled, “A Tale of Two States: The Health Care Income Divide Visualized,” the report (available online as an “interactive explainer”) said raising the bar and bridging the divide would result in over 300,000 fewer readmissions within 30 days of hospital discharge annually among Medicare beneficiaries, reduce the number of uninsured by more than half, and result in about 21 million fewer low-income adults going without needed care because of cost.

The report did not put a price tag on the findings, but a 2012 IOM report estimates the U.S. loses some $750 billion annually to inefficiencies and other missed opportunities in the health care system, with over half of it attributed to unnecessary services, inefficient care or the failure to prevent problems that require expensive intervention.

Ensuring equal access to high quality care is a core goal of a high-performing health system. At Independent Health, we are working with our provider partners to reduce variations in care, eliminate medical care that is redundant or adds no value and implement proven clinical strategies. The results are accruing to the benefit of our community with better overall health and reduced cost trends.

Investing in efforts to improve the overall health and well-being of the entire population makes economic sense. Quite simply, quality care costs less. If we focus on engaging consumers more in their health, rewarding physicians and providers for outcomes and best practice standards, and investing in primary care to ensure greater coordination of care, the quality of care and overall health of our population will improve.

Healthier adults are less expensive to care for and have greater workforce productivity. Healthier children are more likely to succeed in school and grow up to continue to participate in the workforce in the future. A healthy population is also instrumental in maintaining strong regional and national economies, as well as strengthening the nation’s physical and fiscal health.

Michael Cropp, M.D.
President and CEO, Independent Health