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A Real Buy-Right Revolution at Last? Part two: Buying Health

by Scott MacStravic

Though most of Walter McClure’s early discussions about buying right, as well as most discussions of value-based purchasing (VBP) in general, are devoted to sickness care, it seems to me that its greatest application may end up being to health care, in its real meaning. While consumers are bound to be confounded by emotion and pressed for time when making most sickness care decisions, they can afford to both take the time and be more “rational” about choices regarding where they will look for long-range health management services.

Of course, in most cases, at present, at least, their choices are limited or dictated by employer or insurance plan sponsors of health and disease management (HDM) services, since these sponsors pay the costs thereof. Sponsors have the same challenges as do consumers when it comes to identifying the best choices for HDM services – there is very little information available, and none that I know of from any objective comparison source, on which services and providers are best.

Moreover, the “prices” that HDM providers charge vary widely, not merely in amount, but by the type of service provided, the size of the population served, and the basis used for pricing. Most HDM suppliers charge on either a per population basis, or per participant in particular HDM interventions. Such prices cannot be compared at all, unless predictions are made of the numbers of the people in a given population who will participate. Moreover, a few HDM suppliers offer guarantees or risk/reward contracts that override the per population or per participant fees they charge, where the only way the final costs and results can be determined is after results happen and are evaluated.

For consumers who buy their own HDM services, prices tend to vary widely, and again based on different foundations entirely. Many simple, Internet-based interventions are free, or cost no more than $5 per month or so, though some cost as much as $20 per month. Others are part of pre-priced packages, which may run hundreds, even thousands of dollars depending on their length, their intensity, and which health professionals offer them. Still others include HDM services as a major element of their annual retainer for “concierge/boutique” medicine, which may range from a few hundred dollars a year, through a few thousand, and up to as much as $100,000 for the very wealthy.

But there is one great advantage to HDM providers – they are already measuring and publishing their results, not merely their qualifications and care processes, which often comprise the main “quality” information offered by sickness care providers. These results are heavily canted toward payers’ interests in saving money, which may not be material to consumers, at all, but they at least address payers’ main concerns. This often includes quality measures such as participant satisfaction and perceived benefits, including self-rated confidence in their ability to manage their health status, risks, or diseases.

There is also the built-in advantage for consumers that they can take all the time they need to make choices about participating in HDM initiatives, in most cases, since there is rarely an urgent or emergent need involved. If people are screened at an employer health fair and learns that they have an emergent level of blood pressure, for example, which may happen, the usual response is to refer them immediately to their personal physician, or to a physician who can see them right away, rather than wait for an HDM program to begin.

Moreover, insurers and employees often offer useful information on the HDM providers they contract with, together with not merely free participation, but often incentives to enroll, as well. The main limitation in applying VBP to consumer decisions lies in the absence of any national body that makes comparisons across different options. We know that Medicare has found many, indeed most of the disease management efforts by specialized suppliers wanting, but these efforts apply to the narrow domain of chronic diseases, rather than the broad domain of health.

Moreover, they do not include what may be the most important outcomes criteria for employers and the health plans that serve them – the total economic impact of managing disease. Medicare deals solely with the costs of healthcare as its measure of economic impact, while employers and their health plans are looking at workers compensation and disability costs as well. And more important, they are looking at absenteeism, presenteeism, and overall productivity as well as performance impacts of HDM. These are often two to five times greater than healthcare costs, alone, and therefore much more likely to be appreciated and continually sponsored by their sponsors.

If employers and commercial insurers clamor loudly enough for, and especially if they offer to financially sponsor a national body to conduct the same kinds of systematic analysis of HDM programs and providers as has been called for with sickness care, the current lack of comparative data may be overcome, gradually at least. Already, Regence Blue Shield in the Pacific Northwest is collecting and publishing information on clinics and large medical groups in terms of their ability to manage the diseases of their patients, which covers at least chronic condition management performance.

If employers and payers expand or coordinate their efforts, measures of success and prices on HDM services may actually become a reality before similar information on sickness care. Physicians and hospitals have shown great reluctance to contribute to or accept comparative ratings by any third party, disagreeing on complex and confounding quality criteria. The criteria for HDM interventions are generally already agreed upon, by both providers and their customers, so agreeing on a set of measures should not take nearly as long.

Moreover, if payers demand comparative information from all HDM providers, in some standard format and understandable mode of reporting, providers will have little choice but to deliver it. No provider will want to be shut out of consideration for having failed to provide the information called for by their prospects and current clients. And as long as this information includes measures of results for consumers who participate in HDM programs, which it will have to in order to achieve competitive levels of participation among populations at risk, consumers will be well informed as well.

We are not even at the beginning with respect to comparison websites or “report cards” in HDM as is true with sickness care. But once we get started, we are likely to find that it take far less time and effort to create the comparative databases and mechanisms needed for VBP, to the benefit of payers, consumers, and all good performers of HDM services.


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