What the future of health care should look like

In the early 1980s, when I first dipped my toe into the waters of health care and health insurance, there was a severe crisis. Subscribers were livid over health insurance rates. They demanded change in ways that makes today’s complaints look tame.
Yet, three decades later, nothing has changed. Health care costs spiral out of control, and we’re no closer to “solving” the problem.
My previous articles offered several disruptive ideas for solving our national health care problem. Over the years, I’ve presented these ideas to friends and colleagues and few disagree about what must be done. The challenge, however, is in the doing.
This final article offers a glimpse of an improved, properly functioning, sustainable health care system that has undergone true reform. I call this “Future State 2020,” because it’s far enough out there to give us a chance, and close enough given the urgency for change.
• Measuring quality of care. Physician and provider groups have created and adopted uniform standards of quality care. And thanks to almost universal adoption of electronic medical records and changes in physician practice, we now actively measure the quality of care for individual physicians and other providers, and more importantly, those measures are annually made public by the Rhode Island Medical Society and the Rhode Island Hospital Association.
After initial skepticism, physicians and providers have accepted these new measures and are working hard to score better. This brings measurable improvement in the overall quality of care in our state, cost reductions in medical malpractice insurance, and greater competition through transparent, accepted measurement standards.
• Focusing on outcomes. While it took longer, we’ve adopted uniform outcome standards for various illnesses, conditions and injuries. These are measured through survey data overseen by the medical society and the hospital association, and the results (linked to specific individual doctors and hospitals) are published annually.
While quality of care is important, the health care community has acknowledged that outcomes are even more important. Of course, there are challenges (involving patient compliance, for example). But despite the fact that there is more work to be done, it’s a very good start.
• Changing how we pay for health care. Rather than using “fee for service” methods (paying for things done), physicians and hospitals that are part of an accountable care organization are now paid according to the following criteria (for example):
• Bundled payments: A single payment that ACOs accept as full payment (with some exceptions) for all of the medical costs of an assigned population over a specified time period. Bundled payments are computed by algorithms that account for historic care costs for the assigned population, its relative healthiness and other factors. ACOs now bear financial risks when an assigned population’s total medical costs exceed the bundled payment. This incentivizes ACOs to reduce overall cost of care in positive ways. The best way to reduce overall costs of care is getting better outcomes, reducing waste and reducing medical errors. It is decidedly not by rationing medically necessary care. • Outcomes: An ACO population’s relative health is measured and baseline indices are established that take into account such things as risk adjustment, etc. Under this model, ACOs receive significant additional payments based on the extent they improve a population’s overall health. This results, over time, in a healthier population that uses less health care per capita. And vice versa.
• Quality of care: ACO quality of care measurements function to ensure that how physicians and hospitals are providing care complies with or exceeds accepted standards. This means that when ACOs give demonstrably high-quality care, they receive significant additional payments. While I tend to emphasize outcomes over quality of care, quality of care over time should result in better outcomes if the quality standards are the right ones.
• Patient safety and waste. It’s estimated that roughly 100,000 deaths occur each year in American hospitals due to avoidable medical errors. Moreover, approximately one-third of national health care costs result from waste, error, duplication and avoidable postoperative hospital readmissions.
Modern health care reform addresses the imperative to reduce medical error and waste through coordinated and integrated care and health management, universal use of EMRs, and a statewide interoperable Health Information Exchange. Not only do these save billions of dollars, they reduce patient and family suffering, the true bottom line here.
• Plan Design and Financing. Before reform, the design and financing of health insurance kept subscribers and patients largely uninvolved. Though large deductibles and copays were intended to get patients’ “skin in the game,” it really didn’t accomplish that because once those payments were made, there was no further incentive to spend wisely. Deductibles and copays are blunt objects that mostly disincent the financially challenged from getting both proper and improper care. We can do better.
In our future state, patients are much more involved in their own care. Though large deductibles are still a reality, new transparency mandates require the publication of physician and hospital quality of care and outcome results and the fees charged for such medical services. This enables patients, insurers and employers to shop wisely based on quality and price. Referring physicians, mostly primary care physicians, now finally have data enabling them to refer their patients to demonstrably better-quality, better-outcome and lower-cost surgeons and hospitals. This provides more opportunity to improve their population’s overall health, which is money in their pockets, too. Good networks are now limited to quality of care/outcome achieving providers, and there are disincentives for using others. Accountability and competition are where they always should have been – at the provider level, and based on the right measures.
Plan design and state statutes and regulations empower employers, payors and providers to act when patients do not comply with their own care responsibilities or do not live healthy lifestyles. For example, though we do not expect everyone to avoid diabetes, we do expect diabetic patients to take steps within their control to become healthier.
• Resource allocation. To maintain and enhance health care coverage within our means, a statewide coordinated health plan is adopted by Rhode Island with milestones, a firm timetable, and sufficient funding to implement the plan and establish statutory enforcement authority. This must make high-quality, affordable health care available to 100 percent of Rhode Island’s lawful population, regardless of ability to pay.
• The financing model. I believe that the majority of people would prefer some form of private insurance to continue, assuming it’s consistent with reform goals. This requires that the federal and state governments level the playing field and remove hidden taxes and mandates loaded onto private insurers for years.
In Future State 2020, health insurers are a respected part of the health care system, and navigate the intersections of care, money and contracts for the entire system and for the public good. While price is still king, insurers also compete on customer service, higher quality networks, better outcomes, better care coordination and innovative plan designs.
• Bottom Line. This will always be a struggle. Health care is emotional, personal, expensive, local and complicated. As we invent new miracles and fuel the profit motive, we constantly face the challenges of delivering new, expensive miracles to our people without bankrupting the system and its participants.
But, in the end, the fundamental questions remain. What is a life worth? Can we consider how to allocate finite resources and accept limits to rational care? Is there any form of triage that can balance the needs to provide some level of quality care to everyone rather than care without limits regardless of cost or quality or outcomes?
Achieving Future State 2020 presents a challenge of the highest magnitude. We’ve risen to such challenges before, but only when the magnitude of the threat was both immediate and immense. I will leave it to you to decide whether it is immediate and immense enough to warrant action now. •


Jim Purcell served as chief operating officer and CEO of Blue Cross & Blue Shield of Rhode Island for 11 years. This is the final piece of a six-part package on health care delivery and reform.

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