In this blog we’ve talked about health care costs ad-nauseum and how our non-system has the highest costs in the world, in part, because everyone sees a benefit to themselves by doing more and spending more.
Patients believe that they need to do everything to maximize their care, no matter the cost or efficacy of the intervention. Moreover most believe they are entitled to do everything and have someone else (insurance/Medicare/the VA whatever) pay for it. Providers and hospitals figured out a long time ago that doing more means more income. Insurers learned that they could simply pass through the costs without affecting their 20% or share of premiums–check out insurance executives salaries. Suppliers understand that there is no real price competition in health care and if they charge more, someone will pay.
Adding insult to injury Congress in it’s infinite (well lobbied and paid for) wisdom protects manufacturers and suppliers by not allowing the largest purchaser of health care in the country (Medicare) to bargain on price.
So it’s encouraging to find a model that puts in place a braking system to slow expenditures.
For most health care providers, that would be cause for alarm. But not for Advocate Health Care, based in Oak Brook, Ill., a pioneer in an approach known as “accountable care” that offers financial incentives for doctors and hospitals to cut costs rather than funnel patients through an ever-greater volume of costly medical services. Under the agreement, hospital admissions are down 6 percent. Days spent in the hospital are down nearly 9 percent. The average length of a stay has declined, and many other measures show doctors providing less care, too.
Under Advocate’s deal with Blue Cross Blue Shield, certain patients are assigned to the accountable care framework — about 380,000 — and their health costs are projected. If Advocate achieves savings below that amount while meeting explicit quality targets, it splits the money with the insurer. If not, its revenue is at risk.
Read the article for more.
Medicynical Note: It will be fascinating to see whether this “innovation” is effective, and if patients and the other players in the health care game allow it to work. Previously you will recall, a very similar system of cost containment ran into patient and industry opposition in the 90’s.
Just so you know I am covered by a HMO/medicare advantage program and like it.