What will create provider efficiency? It's not what you think

“Probably wishful thinking.” That’s the analysis of Peter Ubel, a renowned Mayo Clinic-trained physician and behavioral scientist at Duke University, in a recent Forbes article, on whether new healthcare models, like Accountable Care Organizations, will achieve that holy grail of improving patient outcomes while lowering costs.


And if we rely on simple economies of scale – merely creating mega-systems without culling underperforming providers and facilities—Dr. Ubel’s assessment is probably spot on.


Sure, there are a handful of the biggest and the best such as Kaiser Permanente, Mayo Clinic, the Cleveland Clinic, UPMC, MD Anderson Cancer Center and their like. They have the technology, the cutting edge science, and vast teams focused on patient quality and efficiency.  They will likely be able to maintain their terrific standards while trimming waste.


But integration into large ACOs alone will not create a safer, more efficient health care system in and of itself. An ACO is only as good as its individual parts. So that’s why superior networks, that combine only the best doctors and facilities, are the key to creating a care experience that reduces both costs and harm.


We talk about the unsustainability of health costs in America today, but even more urgent is the high number of medical errors which are concentrated at underperforming facilities and providers.  Employee lives are at risk when using broad-based networks that fail to excise sub-par doctors or hospitals. The wide disparity between excellent and poor care is not always evident. For instance, in Atlanta, one provider has less than half the mortality rate of a nearby competing facility. Another hospital has half the complications rate of its neighboring competitor.  Given the choice, every employee would choose the hospital where they are more likely to live.


The Affordable Care Act has significantly altered the way employers design and implement their employee health benefits. As larger employers determine their exposure – and more importantly, their employees’ exposure – they are using their consolidated purchasing power and sophisticated data analytics provided by Imagine Health to negotiate discounted reimbursement rates with top-performing providers.


Imagine Health’s precision networks first target physicians who are top performers in each clinical category.  Imagine’s approach then drills down even more to identify the most efficient and cost-effective physicians in that higher performing group to create an employer’s customized healthcare ecosystem. Imagine Health’s goal is to help keep a company’s employees well, because both the employer and the employee ultimately pay a steep price for poor quality.


One thing Dr. Ubel doesn’t take into account is that demanding higher quality will drive health care improvements across the system over time. Imagine’s selection process, for instance, is dynamic. A provider or facility that doesn’t make the cut will be analyzed again semi-annually, for possible inclusion into these high-performing networks.  On the other hand, these biennial “check-ups”  will help maintain a high level of accountability for those already in high-performing networks by  reporting those findings back not only to the employer, but to the providers as well.


The end result? These precision networks’ quality and efficiency improvements typically exceed 20 percent per employee per year over traditional carriers’ broad-panel PPO health plans. And those savings cut across all aspects of care, from hospital in-patient and out-patient care, to care provided by primary care physicians and specialists.  For example, in Dallas, Imagine Health has negotiated rates 26% lower than the national carriers on hospital services, and 22% on PCP and specialist physicians.


Payers and consumers are more concerned than ever about making the right choices that provide a high quality, high-value care experience. But making the right choices and improving the quality of care starts long before a physician aligns with a hospital system to achieve better leverage in negotiating terms with insurers. And it starts long before a healthcare consumer looks at his or her plan to see if there is a nearby provider they like, or one they have used before.


It all starts with the design of a precision, high-quality network that ensures quality is addressed on the front end – based on quality and cost metrics that reveal exemplary track records over time.


And while Dr. Ubel sees a higher quality, higher-value healthcare experience as "probably wishful thinking", we at Imagine Health see it as - certainly within reach.

Rick AbbottComment