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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.