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March 17, 2010 at 08:00 PM
The rising cost of health care in the United States has sparked a national debate, pitting politicians against one another while millions of Americans and small to mid-sized employers are struggling to pay for coverage. Successful health care reform that truly benefits payors, providers, and patients alike requires a focus on preventive medicine and a financial model that rewards and incentivizes clinical value versus utilization.
Few would argue that better-quality care offered at lower costs would improve the national well-being. But people respond to incentives, which are so misaligned in the current health care system that success is elusive.
The current fee-for-service reimbursement model has proven ineffective, promoting quantity over quality and decreasing patient access to their primary care physicians. The current system pays doctors a pre-negotiated rate for activities rendered, based on the type and volume of services performed – not the quality of care provided to patients.
Under current rules, physicians are generally only paid when they work with patients in a clinical setting. Simple questions that could otherwise be dealt with over the phone or through email – which would be more convenient for patients and less expensive to the overall health care system – result in more costly and more time-consuming office visits. But can we blame physicians for trying to see more patients than ever in just one day, often spending only a few minutes with each, when payment is so intimately tied to volume?
Meanwhile, patients often unintentionally drive up costs through their interaction with the health care system. An individual with a sore back may forgo a trip to the primary care office in favor of visiting the emergency room. While the average ER visit costs upwards of $600, the patient’s decision is often fueled by a lack of access to their primary care physician.
Similarly, health plans often restrict usage in order to curtail spending, requiring doctors to obtain authorization for specific services. Utilization management is costly to payors, insulting to a doctor’s medical expertise, and inconvenient to patients. Amid rising health care costs, we end up engaging in the ultimate form of micromanagement, diminishing the patient-doctor relationship and adding unnecessary resources to an already complex health care delivery process.
The key to successful health care reform is to align financial incentives such that doctors and payors, as well as patients and their employers, share in the rewards of meeting a triple mandate:
- Improved clinical outcomes
- Better patient experiences
- Lower costs
What is ‘successful reform’?
Effective health care reform requires the following:
- Physicians must have the freedom to make medical decisions based on individual needs, not generalized guidelines. Any change to the system must recognize health care professionals for their medical knowledge and ability to make appropriate treatment decisions.
- Patients should have better access to physicians. The current system makes it difficult for patients to receive timely care in the appropriate setting. Renewed emphasis on access will not only improve the patient experience, but lower the associated costs of treatment.
- Health plans should pay for quality outcomes, and by extension not pay for poorly delivered care. The pay-for-outcomes model moves beyond the process-oriented payment schemes of today and compensates physicians for meeting clinically and financially meaningful benchmarks.
A new financial model based on these guidelines will reward physicians based on the quality of the care they provide, thus improving the overall experience for patients and curtailing wasteful spending for payors and employers.
