Speedboat to Safety and Savings

It’s slow work to turn around a big ship. And the $3 trillion American healthcare system is one giant luxury ocean liner.

The first promise of the Affordable Care Act, enacted in 2010, was to extend healthcare access to millions of Americans. Six years later, after fending off Congressional attacks, Supreme Court challenges, and website meltdowns, the ACA has, in fact, achieved greater access.


But it’s the second promise of the ACA that is far more challenging - to rein in unsustainable cost increases by rewarding high quality, lower cost care. Unfortunately, healthcare payers and health delivery systems have so far failed to deliver on that second promise.

Case in point: The Centers for Medicare and Medicaid Services inadvertently gave incentive bonuses to 231 low-performing hospitals, according to a recent study published in Health Affairs. The bonuses were designed to reward high-quality, lower-cost care as part of the Hospital Value-Based Purchasing program.


In previous years, CMS bonuses were awarded solely on the basis of quality. In 2015, for the first time, the agency added spending metrics into the equation to encourage hospitals working to rein in costs. But CMS failed to demand a minimum level of quality as part of its analysis.


While the actual amount of these bogus bonuses was small – just .18 percent of Medicare payments, on average – the error points to a greater problem. Large healthcare payers, whether government or private health insurers, are still struggling to figure out how to properly measure and reward quality. Yes, next year CMS will likely course-correct and stop rewarding low-quality care. But that’s another year to turn the huge ship by a single degree.


 Imagine Health, however, is more like a speedboat. Our proprietary analytics engine properly assigns value to doctors and hospitals by comparing cost and quality data. We then build custom, focused networks comprising only the best-performing healthcare providers and facilities for your employees. And since quality is not static, we can quickly pivot to omit or add physicians or health systems as their cost and quality metrics change. We use the buying power of large employer groups to negotiate the best deals with the best practitioners.


The goal is to provide the safest, most cost-effective care for your workforce. That means excluding providers who don’t make the cut. That’s one reason it will take so long to improve quality across large healthcare payers like Medicare. While CMS may stop rewarding lower-quality hospitals, they’ll still remain in the network, dragging down the performance of the network as a whole. By continuing to offer broad access to doctors and hospitals of widely varying quality, large healthcare payers are missing the opportunity to leverage their buying power to improve quality.


There are murky waters ahead as health systems work to lower costs while maintaining and improving on high quality. As an employer focused on ensuring healthcare safety, reducing harm and lowering costs, you don’t want the biggest boat. You need the fastest boat. That’s Imagine Health.              

Rick Abbott1 Comment