National Academies Press: OpenBook
« Previous: 19 Administrative Simplification
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

20
Consumers-Directed Policies

INTRODUCTION

Healthcare consumers are the key stakeholders in patient-centered and patient-driven care. Consumers play a critical role in the medical decision-making process, making choices that ultimately impact the value of care delivered on both individual and societal levels. As a result, healthcare consumerism has been identified as a powerful tool to accelerate changes in the delivery of care (Binder, 2008). To further explore the variety of policies and perspectives central to effectively engage consumers in choosing higher-value services, panelists in this session discuss such tools as value-based purchasing and transparency.

Jennifer Sweeney of the National Partnership for Women & Families reviews research revealing that consumers are seeking partnerships with their healthcare providers; information and guidance about conditions and treatments; tools and support to care for themselves; and open communication that encourages questions, dialogue, and treatment preferences and respects cultural differences. She suggests that meeting consumers’ needs and recognizing their place on the activation continuum must drive any engagement strategy. However, she proposes that the healthcare system has not yet provided the tools or incentives to enable patients to fully engage in their own care. Stakeholders must recognize that the majority of consumers are unaware of quality deficiencies in our healthcare system and are insulated from healthcare costs. As tools to create delivery system changes that address the needs and desires of consumers, she highlights possible policy options, including implementation of patient-centered care models, use of

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

patient experience surveys, changes in benefit design, and consumer-friendly performance reporting.

With the theoretical impact of moving all care to top-tier providers in cost, efficiency, and quality ranging from 0.5 to 5.0 percent of total medical cost, Dick Salmon of CIGNA Healthcare suggests that achieving these theoretical potentials requires providing patients with credible information that is easy to obtain and integrate into the healthcare experience. Additionally, individuals must have reasonable access to preferred providers and benefit incentives. He stresses that barriers to progress include assisting the transition from the customary method of selecting a healthcare professional based on reputation to a model based, in part, on comparison of reliable information on quality and cost. Enabling and rewarding individuals to choose the existing highest-value provider of care offers an immediate impact on the quality and affordability of health care for individuals today and would stimulate all healthcare providers to improve in the future. Because the stimulus for future improvement based on consumer choice is limited by access issues and provider loyalty, he asserts that payment reform remains essential.

Building on these concepts, Dolores L. Mitchell of the Group Insurance Commission describes increasing pressures faced by purchasers to engage their employees in the business of wellness and prudent healthcare choices. By demonstrating how one public employer engages both employees and providers by analyzing provider performance and giving employees financial incentives to use the results—ranging from premium increases to high-deductible plans—she suggests that transparency without consequences is necessary but not sufficient to affect the delivery system. She states that the road to meaningful patient engagement is steep but should be engaged with particular attention to shared sacrifice in the short term and shared responsibility in the long term.

CONSUMER VIEWS OF HIGHER-VALUE CARE

Jennifer Sweeney, M.A.

National Partnership for Women & Families


Many consumer advocates recognize that quality, cost, and coverage are inextricably linked and that all must be addressed to achieve a healthcare system that delivers quality, affordable health care for all. Currently, Americans pay too much for a healthcare system that delivers too little. To bend the cost curve and improve the quality of care, we must address the root cause: a payment system that incentivizes quantity of care over quality of care. However, a key component of any strategy to address this must include shifting the paradigm of consumers—the patients—to examining health care through that very lens of quality. Consequently, the National

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

Partnership—which leads the Americans for Quality Health Care project, funded by the Robert Wood Johnson Foundation and comprised of consumer advocates working to improve the quality and safety of health care in this country—is advocating for changes that realign incentives to drive quality improvement and foster better use of our healthcare resources.

Many of the proposals for healthcare reform are based on the flawed premise that providing transparency in information about healthcare provider quality will shift consumer decisions and drive the market to higher quality and lower cost. However, the limitations of this premise are significant: (1) consumers do not necessarily look at health care through a value lens, and (2) the information communicated to patients in these efforts is not necessarily accessible and understandable by consumers or amenable to decision making.

Drawing on its work in approximately 20 communities around the country, the National Partnership has gathered significant anecdotal evidence of consumers’ perspectives on value in a healthcare context. With two exceptions, premiums and drug costs, consumers are generally insulated from the bulk of costs associated with health care through their insurance coverage and therefore do not conflate health care and value. In fact, in recent consumer focus groups convened by the National Partnership, participants exhibited significant gaps in their understanding of how doctors are currently paid for services, and discussion of finances in the context of the care they receive elicited skepticism and fear (Lake Research Group, 2009). All stakeholders must do a better job of engaging consumers in discussions of healthcare quality improvement so that they, too, see the importance of changing our system to provide higher-value care.

Consumer Engagement Strategies

There are multiple strategies to sharpen consumer awareness about quality health care and in turn drive them to make better-informed healthcare decisions.

Patient-Centered Primary Care

Primary care has the potential to keep people healthier, improve patients’ experiences with the healthcare system, and reduce overall spending. To maximize its possible benefits, the primary care system must be redesigned to facilitate care coordination, communication, access, cultural competency, and other qualities most highly valued by patients.

One way to do this is to implement innovative delivery and payment models, such as the patient-centered medical home. Minnesota saw success in this area in 2008 when consumer advocates participating in the rule-making process to implement healthcare homes legislation used the

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

National Partnership’s “Principles for Patient- and Family-Centered Care” as a guide to ensure that the standards and criteria drafted were truly patient-centered. Another option is to create and leverage tools that help patients and providers get care that meets the needs of both. Such tools can come in various forms:

  • The Americans for Quality Health Care project has created a Patient Empowerment Training module aimed at engaging patients in their care. This train-the-trainer module teaches patients to seek information about their conditions, the appropriate care for their conditions, and how well their healthcare providers deliver care for those conditions.

  • Physicians have received training in and used motivational interviewing as a strategy for leveraging people’s own goals and values to increase their intrinsic motivation to change their behavior.

  • Shared decision-making strategies have given patients information and opportunities to make decisions in partnership with their healthcare providers. Research shows that when patients have accurate and unbiased information about their treatment options, they tend to make more conservative and less invasive decisions that often result in better outcomes and thus greater value.

The most significant barrier to achieving patient-centered primary care is increased cost. The attributes that patients value in primary care such as care coordination, communication, and access often require that physicians redesign their practices, hire additional staff, and increase the amount of time they spend with patients. These costs are a burden for many primary care physicians, particularly in our current fee-for-service system, which typically does not reimburse these costs. Separate payments for the services associated with care coordination and access and increasing payments to primary care physicians relative to specialists might diminish these financial barriers. Even if the financial costs are overcome, there will be considerable work left to communicate with consumers the importance of primary care and to encourage their use of primary care over specialty care.

Meaningful Information

Health care is increasingly recognized as a shared responsibility among individuals, employers, providers, insurers, and the government. Consumers are expected to view health care with a “value lens” when making decisions, but little has been done to supply them with meaningful, easy-to-understand information about the performance of healthcare providers.

One of the best ways to engage consumers to seek out value is to provide them with information about how well their healthcare provid-

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

ers deliver care. Until patients understand that quality is not a given and until they see the variation among providers, they will not seek out quality and value in the way they are expected to. It is important to clearly define quality care; provide cost and quality information together; ensure true differentiation among providers so that they are not all grouped into a middle category; rank providers by performance; and avoid using medical jargon, statistics, and so forth. For examples of consumer-friendly public reporting, look to the Puget Sound Health Alliance Community Checkup (http://www.wacommunitycheckup.org/) and the Maine Health Management Coalition (http://www.mhmc.info/).

Historically, many public performance reports have not been consumer friendly. To be more accessible to consumers, performance reports must include meaningful measures that patients care about, such as patient experience, and patients must appreciate the importance of actively participating in patient experience surveys. Such information should be collected not just in hospitals via the H-CAHPS (Hospital-Consumer Assessment of Healthcare Providers and Systems) tool, but in nursing home, hospice, and ambulatory care settings as well.

Patient experience surveys have been used effectively in the field, including in Minnesota, Memphis, and Kansas City. Survey sponsors include physicians, consumer groups, and health plans. High survey response rates—54 percent in Memphis and 41 percent in Kansas City—indicate that patients are eager to share their experiences and are interested in learning about other patients’ experiences with care. If used broadly in all settings of care, patient experience surveys will go a long way toward getting consumers to think about their health care from a value perspective.

The greatest obstacle hindering the proliferation of patient experience surveys is the postage associated with disseminating and returning the surveys by mail. More research is required to see whether an electronic survey could replace the traditional hard-copy format, thereby driving down costs. It is important, however, to ensure that whatever survey format is used takes into account ease of use by consumers.

Healthcare providers, too, in some cases impede the broader use of patient experience surveys. Many healthcare providers remain unsupportive of public performance reporting, particularly performance in “soft-skills” areas such as communication. Non-physician stakeholders who sponsor reports should make every effort to engage healthcare providers in the process and to respond to any concerns they might have about particular measures or survey methodology.

Benefit Design

Designing benefits to give consumers incentives to make truly value-based decisions is an additional strategy to sharpen consumer awareness

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

about quality health care. It is important to ensure that consumers have access to information about cost and quality when redesigning benefits and that incentives are not designed simply to encourage consumers to choose the cheapest care. Benefit design should also encourage consumers to seek out the primary and preventive care that will keep them well and support their efforts to effectively manage their chronic conditions. This can dramatically achieve both better health outcomes and lower costs. For example, in 2001, Pitney Bowes lowered copayments for asthma and diabetes medications for its employees and subsequently reported a $1 million savings from reduced complications (Chernew et al., 2007).

Efforts to generate consumer-friendly public performance reports and offer benefits that encourage value-based decisions are often thwarted by various stakeholders. In some cases, physicians oppose performance measurement in general, do not approve of the measures or methodologies used, or question the reliability of the data. In other instances, consumers are angered that they must pay a higher fee to visit a doctor they have been seeing for decades. Engaging healthcare providers in these efforts may minimize their concerns. With consumers, it is crucial that changes in benefits be explained prior to roll-out to help them understand that the changes are based on value and are not punitive.

Conclusion

The National Partnership’s work with consumers and advocates across the country has shown that consumers cannot be expected to play a greater role in driving the healthcare system to deliver higher-quality care while lowering costs without being given the incentives, tools, and meaningful, comprehensible information necessary to understand health care from a value perspective. The strategies detailed above should be employed by consumer advocates and other stakeholders to help achieve this goal.

INSURERS, CONSUMERS, AND HIGHER-VALUE CARE

Dick Salmon, M.D., Ph.D., and Jeffrey Kang, M.D., M.P.H.

CIGNA Healthcare


People naturally want to be in the best health and have the lowest out-of-pocket healthcare costs. Having good health includes making optimal lifestyle choices, focusing on prevention, managing acute illnesses, and optimizing chronic illness management. Individuals also face several layers of choice in striving to achieve or maintain their health: the choice of health plan; the choice of physician, hospital, or other provider of care; the choice of treatment; and the choice of lifestyle. With respect to choice of physician, hospital, or other provider, significant variation occurs in

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

price, efficiency, and/or quality. Understanding where the variation exists and providing the best information available at the point of choice with appropriate incentives are critical to achieving better quality and making health care more affordable.

Variation for some types of care occurs principally in the cost domain (price for the item or service), with less variation for the majority of clinical circumstances in the quality domain. Examples in this category include laboratory, high-tech imaging, ambulatory surgery, and pharmaceuticals. In each of these areas there will be a subset of clinical circumstances in which there are quality differences among providers. However, for the majority of clinical circumstances, the quality of care is both very high and equivalent among providers. Variation for other types of care, such as that provided by hospitals and physicians, occurs in both the total cost for the episode of treatment (efficiency, a combination of the unit cost and utilization of service rate) and quality domains over a broad spectrum of clinical circumstances as shown in the Table 20-1.

TABLE 20-1 Potential Savings from Optimization of Cost and Quality

Area

Domain

Potential

Price

Efficiency

Quality

Cost (% of TMC)

Quality

Laboratory

X

 

 

0.75-1.25

Neutral

Hi-tech imaging—CT, MRI, PET

Lowest-cost facility within 15 miles

X

 

 

0.5-1.5

Neutral

Ambulatory surgery—16 procedures

Lowest-cost facility within 15 miles

X

 

 

0.5-1

Neutral

Pharmacy

Optimal use of therapeutically equivalent generics

X

 

 

3.0-5

Neutral

Hospital—9 procedures

Top 33% of facilities

 

X

X

0.5-1

>30% reduced mortality and complication rate

Specialty physicians

21 specialties, top 33%

 

X

X

8-12

5% improved EBM adherence; >20% reduction in readmission rates

NOTE: CT = computer-assisted tomography; EBM = evidence-based medicine; MRI = magnetic resonance imaging; PET = positron emission tomography; TMC = total medical cost.

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

An estimate of the potential for improvement can be developed by first identifying the top-tier provider group and then calculating the theoretical improvement that would occur if everyone achieved the same results as those in the top tier. When significant variation occurs in both quality and efficiency, the top tier must consist of those providers who demonstrate both superior quality and superior efficiency.

For services such as laboratory, high-tech imaging, ambulatory surgery, and pharmacy, the primary variation occurs in price, and the potential impact of optimization is 0.5 to 1.5 percent of total medical cost (TMC) for each area. For pharmacy, the optimal substitution of therapeutically equivalent generics for brand drugs would have an impact of 3 to 5 percent TMC.

For hospitalizations, we evaluated 29 different procedures (such as coronary artery bypass graft [CABG]) and medical conditions (such as admission for pneumonia). We then selected the hospitals that performed in the top third in terms of quality (complication rate, mortality rate, Centers for Medicare & Medicaid Services [CMS] quality measures) and the top third in terms of efficiency (cost per admission), resulting in a selection of about 15 percent of the evaluated facilities for each of the 29 admission types. The theoretical movement of all care to these facilities would reduce mortality and complication rate by more than 30 percent and cost per admission by 40 percent, resulting in a 0.5 to 1 percent impact on total medical cost.

For physicians, we initially focused on the care provided by 19 different specialty types, such as cardiology, endocrinology, and so forth. We focused on specialists because they control the largest portion of the healthcare dollar. In addition, the patient-specialist relationship is often episodic, and therefore a greater opportunity exists to influence future choice. Again, the top tier was selected based on both quality parameters, such as adherence to evidence-based measurement standards, and cost efficiency as assessed by episode treatment groups. In this case, selecting about the top third of physicians based on both criteria and theoretically moving all care in a marketplace to those physicians improves cost by about 8 to 12 percent of TMC. Likewise, adherence to evidence-based medicine (EBM) standards would improve quality by about 5 percent, and the readmission rate would be lowered by about 20 percent.

Achieving these theoretical potentials requires giving patients credible information that is easy to obtain and integrate into the healthcare experience. CIGNA has found that when we provide information to people on the cost of high-tech imaging at the time the study is ordered by their physician, in 80 percent of cases the individual will choose the most affordable imaging center. Also, individuals must have reasonable access to preferred providers. Finally, benefit incentives are critical to encouraging people to consider quantitative quality and cost information in their decision making. Small incentives—for example, a $10 co-pay difference for seeking

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

care from preferred specialists—increase awareness without significantly influencing choice. Larger incentives, such as a 20 percent coinsurance difference between in-network and out-of-network providers, influence choice. CIGNA has found that with carefully designed consumer-directed health plan benefits, individuals engage in reducing their total medical expenditures substantially—for example, by choosing generics more often—while maintaining or improving quality of care—for example, medication adherence, receipt of preventive health visits, and receipt of care in accordance with chronic disease guidelines (Healthcare Effectiveness Data and Information Set [HEDIS] measures).

Barriers to progress include assisting individuals to transition from their customary reputation-based method of selecting a healthcare professional to one based at least in part on comparison of quality and cost information. Increasing the credibility of the information is critical. Physician ambivalence or reluctance to assist patients in these decisions must be overcome by full disclosure of conflicts and by payment reform with a transition to financial incentives to improve outcomes in both cost and quality for patients.

Enabling and rewarding individuals to choose the existing highest-value providers of care offers an immediate impact on the quality and affordability of health care for individuals today and stimulates all healthcare providers to improve in the future.

The stimulus for future improvement based on consumer choice is limited by access issues and physician or hospital loyalty; thus, payment reform remains essential—paying for quality and efficiency (total cost) and not quantity—to improve future performance.

POLICIES SHAPING CONSUMER PREFERENCES ON VALUE

Dolores L. Mitchell, Group Insurance Commission (GIC),

Commonwealth of Massachusetts


Eliciting informed consumer preferences among treatment options, encouraging consumers’ participation with their clinicians in a healthcare team effort, and keeping costs under control present purchasers with a knot of Gordian dimensions. Reweaving the strands into a valuable fabric rather than cutting the entire knot is beyond the job description of most purchasers. Hoping to contain costs and ensure employees’ satisfaction with their health benefits, purchasers have, in recent years, been bombarded with suggestions for getting their employees to contribute, not just dollars, but their hearts and minds as well, to the business of reducing their health risks and making prudent healthcare choices. Some employers focus on long-term gain via wellness programs, or on short-term gains, raising employee contributions and out-of-pocket costs. Others encourage expression of consumer preferences, sometimes at the risk of increasing already overused services.

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

Many purchasers have tried but few have been successful, year in and year out, in containing costs, advancing quality, and involving consumers. A limited number of successes have occurred, but with unknown potential for replication outside of the culture that fostered them. Kaiser, Geisinger, HealthPartners, Caterpillar, Pitney Bowes, and a few others come to mind; they are much admired, often cited, and rarely copied.

The Group Insurance Commission of Massachusetts

The Group Insurance Commission (GIC), Massachusetts’ largest employer-sponsored health benefits purchaser, has attempted to engage both employees and providers in improving the value of their health care. Employees are provided with comparative data about individual physicians and hospital performance and then given financial incentives to use providers who are more highly rated. The basic premise is that transparency is necessary, but not sufficient, without consequences. Also, although we have found the path to meaningful patient engagement on the comparative value of provider selection to be a steep one, we have also determined that it is a path well worth taking, for purchaser and enrollee alike.

The GIC is the state agency that manages life, health, long-term disability, and other benefits (excluding pensions) for state employees, dependents, retirees, survivors, a small but growing number of municipalities, and most public authorities. The GIC, unlike many state purchasing pools, also covers the entire state public higher education system. As such, the GIC is the largest purchaser of commercial health insurance in New England. The agency is statutorily semiautonomous, but given its current annual spending of more than $1.5 billion in public funds, its legal independence is more fiction than fact.

The GIC is self-insured for three-quarters of its enrollees and also offers three fully insured health maintenance organizations (HMOs). Only two of its six plans are for-profit (Health New England and Unicare, a Wellpoint subsidiary), and the GIC does not currently offer Blue Cross Blue Shield of Massachusetts or any major national plan.

The GIC does not negotiate benefits with employee unions; premium contribution splits between employees and the state are determined by the annual appropriation act. However, premium levels and the benefit programs are determined by the commission itself.

The GIC was an early adopter of mail order drugs, tiered pharmaceutical co-pays, mental health parity (before it became law), intensive—and expensive—cardiac rehabilitation programs, and disease management programs. Its cost trends have consistently been below national or state trends. Nevertheless, the trends are upward bound, except for the few years of HMO dominance before the backlash annihilated much of the management aspects of managed care.

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
The Challenge of Unsustainable Growth in Costs

By 2002, the GIC had tested all the conventional solutions, but still faced unsustainable increases in per capita health spending. Working with its consultants from Mercer Health and Benefits, the GIC decided to focus on pressing for faster improvement in overall physician performance. Mercer consultant, Dr. Arnold Milstein, pointed out to GIC staff and its commissioners that since physician decisions are estimated to govern more than 80 percent of health spending and are associated with significant physician variation, motivating physicians to emulate peers who attain high-quality scores and use healthcare resources judiciously represented an opportunity to affect both. In drafting its Request for Proposal for a new contracting cycle, the GIC required that health plans send their patient-anonymized book of business claims data to Mercer to enable comparisons of physicians on measures of quality and use of healthcare resources. Symmetry’s widely used Episode of Treatment Grouping software was selected as the basic analytic tool to compare physician use of healthcare resources. All bidders agreed to participate, and the agency initiated a series of meetings with the Massachusetts Medical Society to explain the program’s goals and methodologies. Dr. Milstein attended a number of these meetings to explain to physicians the value for performance improvement of such comparisons linked to consumer involvement through the use of copayment differentials based on physician tiering.

At the same time, a quality-of-care comparison, not dependent on medical record review, was sought, since the GIC was committed to tiering decisions based on quality, not just cost. Resolution Health, led by Earl Steinberg, M.D., a Massachusetts General Hospital-trained internist and former professor of medicine at Johns Hopkins University, was selected to provide the analysis. Using the aggregated database, Resolution Health looked for claims-based documentation that physicians performed the tests, prescribed the medications, and performed the examinations called for by major national standard-setting organizations such as HEDIS, the Agency for Healthcare Research and Quality, and specialist societies. Adherence to guidelines and standards that could not reliably be determined via claims data was excluded. For example, annual flu shots cannot reliably be demonstrated by examining claims since they are often administered without generating a claim. Dr. Steinberg also made several visits to the Massachusetts Medical Society and attended multiple meetings to describe the measurement methodology and to gather suggested refinements.

The Clinical Performance Improvement Initiative

The program went live in 2005 and is now in its fifth year of operation. The Clinical Performance Improvement (CPI) initiative, sponsored by the

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

GIC in Massachusetts, again compares physicians on two dimensions of value and offers consumers lower co-pays when they seek care from higher-scoring physicians. Several national insurance companies have mounted similar programs, but the CPI initiative is purchaser-driven rather than insurer-driven, aggregating claims data for six unrelated health plans.

In Massachusetts, the passage of time since 2005 has brought more standardization and refinement of the CPI. Physicians’ unexpected objections to finding themselves in different tiers in different plans motivated GIC’s move toward greater standardization of the plans’ tiering decisions. The health plans, also unexpectedly, supported greater standardization of specialties to be tiered, quality measures to be used, and the elimination of supplementary plan-based measures. All plans now tier a core group of medical specialties, and only a few tier primary care physicians (PCPs). The CPI concentrated on specialists because “that’s where the money is,” and it is also the way most Massachusetts physicians are credentialed.

The program is challenging to implement, requiring linking physicians across six plans, accurate identification of practice specialties, and appropriate attribution of accountability to physicians. Each of these issues has proved complex and occasionally contentious. Response to physician complaints about incorrect tier placement proved challenging but was addressed by a probability analysis devised by a nationally distinguished bio-statistician. It attempts to factor in patient behavior and measure difficulty. Its statistical elegance is not easily appreciated by many physicians, but it does attempt to deal with some of their concerns.

However, the communication with and buy-in from patients have been positive. The agency has attempted to communicate the program’s rationale and procedures to its members in conformance with the principle of keeping the message as simple as possible. A “Select and Save” slogan was chosen, with a subtitle of “Quality and Cost.” The three physician performance tiers are identified by one, two, and three stars and accompanying descriptors of “Excellent,” “Good,” and “Standard,” in an attempt to avoid pejorative language. The GIC used simple vignettes to explain how enrollees can use the program to select new providers or as an informational resource for discussion with their PCPs when they are being referred to hospitals or specialists. This year, performance-based hospital tiering was added, linked to more significant copayment differentials. Complaints from hospitals or patients have been rare.

Objections to CPI Reform

Nonetheless, the response of physicians, as represented by the official position of the Massachusetts Medical Society, has been in strong opposition to tiering of individual doctors. Although it is not clear that they would have embraced tiering of physician groups, they prefer that to tier-

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

ing individual doctors. Those physicians who have complained are often very angry, but the number of complainants has not been overwhelming. The Massachusetts Medical Society filed suit against the GIC’s director, the agency itself, and two of the six participating plans. Several of the claims in the lawsuit have been dismissed, but the lawsuit is still pending. The response of enrollees, on the other hand, has been de minimis. Complaints about co-pay tiers have been rare. That may be because the co-pay differentials have been kept low, largely $10 to $15. The commission has authorized researchers from the Harvard School of Public Health to evaluate the program, including patient surveys. These results will be forthcoming in 2010.

Conclusion

Despite its implementation challenges and the discomfort of the ensuing conflict, the CPI initiative has proved an exhilarating endeavor. The CPI initiative addresses the roots of how physicians actually use healthcare resources: how they adopt—or do not adopt—nationally endorsed quality guidelines and their mind set about their responsibility for conservation of healthcare resources, not just in their own offices, but in all services they order for their patients. It is a much preferred alternative to asking state employees to forgo wage increases in order to pay for inefficiently delivered health care.

It would be presumptuous to say that the CPI has been transformative, but when all is said and done, we believe that it has already contributed to raising physicians’ attention to consumer dependence on the need for physicians to lead efforts to improve the value of their services to society and particularly to lower-income citizens who don’t have the wherewithal to buy up. Much of the literature about performance incentives and public reporting of quality and cost has focused on the necessity of getting physician buy-in. Physician buy-in is desirable, and listening to physician input is essential. However, purchasers must prioritize employee well-being and employers’ ability to meet medical needs at costs that employers and employees can jointly sustain. This is a conscientious purchaser’s primary responsibility. It will increasingly require innovations such as the CPI to boost U.S. physicians’ stewardship for the value of health care.

REFERENCES

Binder, L. 2008. The power of consumerism. Changes accelerating in healthcare purchasing. Modern Healthcare 38(45):28-29.

Chernew, M. E., A. B. Rosen, and A. M. Fendrick. 2007. Value-based insurance design. Health Affairs (Millwood) 26(2):w195-w203.

Lake Research Group. 2009. Focus group analysis. Washington, DC.

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×

This page intentionally left blank.

Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 569
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 570
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 571
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 572
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 573
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 574
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 575
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 576
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 577
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 578
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 579
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 580
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 581
Suggested Citation:"20 Consumers-Directed Policies." Institute of Medicine. 2010. The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary. Washington, DC: The National Academies Press. doi: 10.17226/12750.
×
Page 582
Next: Section IV: Getting to 10 Percent »
The Healthcare Imperative: Lowering Costs and Improving Outcomes: Workshop Series Summary Get This Book
×
Buy Paperback | $125.00 Buy Ebook | $99.99
MyNAP members save 10% online.
Login or Register to save!
Download Free PDF

The United States has the highest per capita spending on health care of any industrialized nation but continually lags behind other nations in health care outcomes including life expectancy and infant mortality. National health expenditures are projected to exceed $2.5 trillion in 2009. Given healthcare's direct impact on the economy, there is a critical need to control health care spending.

According to The Health Imperative: Lowering Costs and Improving Outcomes, the costs of health care have strained the federal budget, and negatively affected state governments, the private sector and individuals. Healthcare expenditures have restricted the ability of state and local governments to fund other priorities and have contributed to slowing growth in wages and jobs in the private sector. Moreover, the number of uninsured has risen from 45.7 million in 2007 to 46.3 million in 2008.

The Health Imperative: Lowering Costs and Improving Outcomes identifies a number of factors driving expenditure growth including scientific uncertainty, perverse economic and practice incentives, system fragmentation, lack of patient involvement, and under-investment in population health. Experts discussed key levers for catalyzing transformation of the delivery system. A few included streamlined health insurance regulation, administrative simplification and clarification and quality and consistency in treatment.

The book is an excellent guide for policymakers at all levels of government, as well as private sector healthcare workers.

  1. ×

    Welcome to OpenBook!

    You're looking at OpenBook, NAP.edu's online reading room since 1999. Based on feedback from you, our users, we've made some improvements that make it easier than ever to read thousands of publications on our website.

    Do you want to take a quick tour of the OpenBook's features?

    No Thanks Take a Tour »
  2. ×

    Show this book's table of contents, where you can jump to any chapter by name.

    « Back Next »
  3. ×

    ...or use these buttons to go back to the previous chapter or skip to the next one.

    « Back Next »
  4. ×

    Jump up to the previous page or down to the next one. Also, you can type in a page number and press Enter to go directly to that page in the book.

    « Back Next »
  5. ×

    Switch between the Original Pages, where you can read the report as it appeared in print, and Text Pages for the web version, where you can highlight and search the text.

    « Back Next »
  6. ×

    To search the entire text of this book, type in your search term here and press Enter.

    « Back Next »
  7. ×

    Share a link to this book page on your preferred social network or via email.

    « Back Next »
  8. ×

    View our suggested citation for this chapter.

    « Back Next »
  9. ×

    Ready to take your reading offline? Click here to buy this book in print or download it as a free PDF, if available.

    « Back Next »
Stay Connected!