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Bridging The Divide


Health insurance CEOs are caught in a tug of war between companies whose employees want affordable care and healthcare providers that desire a decent return on their services. Health insurance CEOs are caught in a tug of war between companies whose employees want affordable care and healthcare providers that desire a decent return on their services. Yet many answers can be found in Europe, South America and Canada — and even the United States.


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round the world, countries are struggling to provide quality healthcare to their citizens. While each of these efforts is unique to its nation, there are common issues shared by all of them. At the heart of these is the issue of affordability. New technologies and the inexorable growth of aging populations make these issues even more difficult by increasing both the cost and the need for this care. What follows is a discussion about some of the elements and principles around which future health systems need to be structured.

Common Issues

Causes of poor care include lack of universal coverage and/or inadequate capacity of the healthcare system, creating uneven access to care, and gaps in quality from the underuse, overuse or misuse of care or services. Rising costs leave an increasing number of people without coverage and/ or access to care, and often restrict the services they are allowed access to. Numerous studies support the fact that underuse of effective services is a huge problem.

Brazilian municipalities with high enrollment in a communitybased primary healthcare program saw chronic disease hospitalization rates that were 13% lower than those of municipalities with low enrollment

Indeed, people who would benefit from services — be they preventive in nature (such as screening for colon cancer) or helpful in controlling the symptoms or progression of a chronic disease — receive those services only half as often as they should. Similarly, with respect to overuse, many studies have shown that 30% to 50% of services offer no value to the individual receiving them. In fact, in some of these cases the individual is more likely to suffer harm than benefit. While there is less information to support the incidence of misuse, this dimension of poor quality also contributes significantly to the challenge of providing quality care. These gaps in quality can be linked to specific problems within the healthcare system. They include (in no specific order of importance):

  • Flawed payment methodologies
  • Information gaps relative to patients’ health needs in planning and at the point of service
  • A lack of or diffuse accountability for results
  • Fragmentation of the care delivery system, with poor coordination or communication between caregivers
  • Little experience in collaborating between organizations

All of these have contributed to the complexity of the healthcare system and make it difficult for providers, not to mention patients, to navigate. While these system issues are responsible for the gaps in quality, other forces are the major drivers of costs. The three major factors driving the unsustainable trends in healthcare costs are aging populations, resultant increases in chronic diseases such as diabetes, cardiovascular conditions and cancers, and the proliferation of new technology. In addition, it is clear that compensation methods for providers are a major enabler — if not an absolute driver — of current cost trends.

Solutions

Managing Chronic Disease

While nothing can be done about the aging of populations, we can certainly do a far better job of preventing or managing chronic diseases. There is great promise in care redesign via patient-centered medical homes (PCMH) or advanced primary care models (which I will discuss later). That said, the most promising results in fostering improved health behaviors in individuals are coming from efforts such as the Robert Wood Johnson Foundation’s Aligning Forces for Quality (AF4Q) initiative, which helps providers, individuals and communities in the United States redefine their roles and responsibilities and work together to deliver more effective healthcare. Such programs work because much chronic disease stems from individual decisions about behaviors — diet, exercise, smoking, and seeking proven effective preventive services such as cancer screenings.

the aligning forces for quality initiative helps providers, individuals and communities work to gether to deliver more effective healthcare.

One example: In 1994 Brazil launched the Family Health Program, which is now the world’s largest community-based primary healthcare program. Under this program, teams of at least one physician, one nurse, a medical assistant, and four to six trained community health agents delivermost services at community-based clinics. They also make regular home visits and conduct neighborhood health promotion activities. Between 1999 and 2007, hospitalizations in Brazil for ambulatory-care-sensitive chronic diseases, including cardiovascular disease, stroke and asthma, fell at a rate almost twice that of hospitalizations for all other causes. In municipalities with high Family Health Program enrollment, chronic disease hospitalization rates were 13% lower than in municipalities with low enrollment, when other factors were held constant.

Accountable Care Organizations

In the United States, there is considerable interest in a new approach to managing care — accountable care organizations. ACOs are seen as a way to provide better-quality care at lower costs. The need for more accountability in caring for patients is clear. Unfortunately, there is too much talk about the organizations that will do it and not nearly enough about what accountable care looks like when done well. Providing accountable care means using a specified amount of money to maintain or improve the health of a defined group of people. Health insurance companies have had this responsibility for some time. Unfortunately, the contractual relationships with the providers, as well as the payment systems and/or methodologies, have not transferred this accountability effectively. While some insurers have put payment systems in place to reward providers for better outcomes, in large part providers have been rewarded for delivering volumes of services without regard to cost. The healthcare reform enacted in the Netherlands in 2006 goes a long way toward addressing this problem. The new system uses a combination of regulation and an insurance equalization pool run by the state to transfer responsibility. Insurance companies are mandated to provide at least one policy that meets a government-set minimum standard level of coverage, and all adult residents are obliged by law to purchase this coverage. Insurance companies receive funds from the equalization pool to help cover the cost of coverage and compensate for different risks presented by individual policy holders; insurance premiums cannot be based on health status or age. Patients dissatisfied with one insurer have an opportunity to choose another at least once a year. As a result of this system, health insurers are effectively responsible for the health

In the Netherlands, thanks to reform enacted in 2006, health insurers are effectively responsible for the health of a self-selected population.

of a self-selected population. Because it is built around a fixed price, they have every incentive to keep that price down and deliver better outcomes. In a 2010 study, the Netherlands’ healthcare system was ranked first in a comparison with systems in Australia, Canada, Germany, Great Britain, New Zealand and the United States.

Patient-Centered Medical Homes

There is mounting evidence that the efforts to develop patient-centered medical homes (PCMH) or advanced primary care practices are making significant progress in delivering quality care. A PCMH practice is accountable for defined elements of care for a specific patient population. Reimbursement models differ among PCMH models, but there is movement away from fee-forservice reimbursement. The Colorado Clinical Guidelines Collaborative, a nonprofit coalition of health insurance plans, physicians, hospitals, employers, government agencies and other entities working together to improve healthcare in Colorado, recently instituted a PCMH pilot. The pilot was initially set up with 16 family medicine and internal medicine practices, representing a total of 17 sites. Health insurance plans, large employers, key hospital groups, physician societies, the Colorado Department of Public Health and Environment, and the University of Denver Health Science Center were also involved in the implementation and operation. The outcomes, both financial and clinical, are impressive, and include a return on investment of 3:1 and a 22% decrease in emergency room visits, for example, at one health plan.

The right mix of cargivers will depend on both the population’s health needs and the chosen care delivery model.

Information

What information will be needed for each population of patients is a key issue and will take a lot of effort to decide. The local or regional disease burden will be unique to each area’s population. So decisions on which services are needed and how they should be delivered should reflect the needs of the population, the values and priorities of the region, and the capabilities of the region. Local stakeholders should have much more say about how resources should be allocated than should a central resource like the U.S. government health program administrator Centers for Medicare & Medicaid Services (CMS) in Washington or a health department authority in some state capital.

No. 1
Rank of the Netherlands’ healthcare system in a 2010 study, as compared with Australia, Canada, Germany, Great Britain, New Zealand and the United States

When discussing accountable care organizations, policymakers should ask to whom and for what these organizations are accountable. It is not enough to understand what care they will be required to provide. It must also be very clear who will be responsible for making sure that care is provided well and adequately. Of course providers will answer to CMS about Medicare enrollees, but there needs to be similar accountability to state, local and regional stakeholders for both Medicaid and commercial enrollees.

Technology

While technology has been an incredible tool in advancing healthcare, it is only a means to an end. Healthcare will remain a relationship “business” where the trust and relationships between people set the stage for better results. Current payment systems and policies have encouraged the rapid and sometimes premature adoption of new technologies. In the United States, where more than 30% of Medicare spending is devoted to highly technical care during the last few months of life, many individuals could benefit from more discussion about how to approach care decisions at this time.

Clearly the coordination of care and communication will be enabled by technology such as electronic health records and health information exchanges. Understanding the needs of patient populations will require information technology new to many organizations. Physician groups and hospitals have previously not needed to profile the populations of patients they serve in order to understand the disease burden the population carries. Predictive modeling tools to identify those patients at highest risk of experiencing an adverse event will allow the allocation of resources to help avert those situations. In 2001 health insurance provider BlueCross BlueShield of Tennessee (BCBST) began applying predictive modeling techniques to member health and claims data in an effort to improve both the delivery and the quality of care. BCBST first used these techniques to make sense of mountains of clinical information and to pinpoint clusters of diagnoses, procedures and patterns of illness. Having this information allowed for the deployment of specialized service programs, such as promoting the use of beta blockers, enhancing medication compliance and coordinating care. This allowed them to avoid disease progression while providing a high level of patient support, which in turn drove down costs by reducing the amount of acute care these patients needed. Today BCBST has a sophisticated data warehouse and business analytics operation. It can, or will shortly be able to, serve up analytics to major consumers, deliver individual history and predictions to members, give near-real-time performance management, and capture structured and unstructured information.

Regional Planning

In the United States, regional health planning authorities have played an important role in helping to allocate resources. In New York these regional authorities were mostly eliminated in the late 1980s and early 1990s. One of the few that remained active and effective was in Rochester. Six years ago, the state put together the Berger Commission to make recommendations about downsizing health system capacity across New York to better reflect the actual healthcare needs of each region. The only region that didn’t require any downsizing: Rochester. France recently undertook a similar effort that underscored the importance of regional planning. It rationalized eliminating service duplication and excess capacity according to the needs of regional populations. In both cases the emphasis on understanding the region’s capabilities and its population’s needs led to rational decision-making. In the United States, population health assessments such as the recent work published by the University of Wisconsin Population Health Institute can be used as a basis for assessing the overall health needs of groups within a specified geographic region. Once the geography has been defined and the health needs of the population have been carefully delineated, the next important task is determining the workforce needed to provide the requisite services. The right mix of caregivers — primary care physicians, specialists, nurses, pharmacists and other professionals — will depend on both the population’s health needs and the chosen care delivery model.

Many investments can be made in which competitors or nontraditional partners may find that investing together lets them lower costs and increase collaboration.

New Roles

Both the teamwork within the primary care practices and the coordination of care between primary care physicians, specialists and other providers speak to the need to have clearly defined roles and responsibilities within the systems of care. New roles for care coordinators, health educators, community case workers and clinical informatics experts will all be important building blocks as we better understand the gaps in the care system and how best to close them.

Co-Opetition

The inevitable decrease in total resources available for healthcare means that countries, states and regions will have to learn how to do more with less. Here is where the concept of “co-opetition” comes into play. Many investments can be made — particularly in the area of IT — in which competitors or nontraditional partners may find that investing together lets them lower costs and increase collaboration while continuing to preserve a strong basis for competition. Some regional health information organizations, such as the Western New York Clinical Information Exchange, are good examples of this. Seven competing healthcare organizations in the Buffalo region have joined to create a dedicated information system that preserves the ability of the individual organizations to compete on the use of their own data. Areas that can strike a balance between collaboration and competition will enjoy a significant advantage in the resourceconstrained future.

Conclusion

To ensure maximum value for the resources invested in healthcare, several things must happen: Accountability needs to be defined; data systems and standards have to be established for tracking populations’ health needs as well as for evaluating the success of interventions; new roles must be defined, with teamwork and communication more important than ever before; and new skills must be brought to bear, not the least of which is the ability to collaborate across previously impenetrable boundaries. Only by doing these things can we bring people the healthcare they deserve, at a price they can afford.

Published September 2011

© Copyright 2011. The views expressed herein are those of the author and do not necessarily represent the views of FTI Consulting, Inc. or its other professionals.

About The Author


Michael W. Cropp
M.D., MBA, President and Chief Executive Officer, Independent Health

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