Cost Doesn’t Equal Quality – Same Health System Edition

Even when dealing with the same health system it is important to monitor the facilities you are directing care to.

In parts 1 and 2 of this series, we looked at two Florida facilities and showed the complete lack of correlation between the facility’s cost and the quality output.

Today, we look at three facilities ALL IN THE SAME HEALTH SYSTEM… IN THE SAME CITY… with differing costs and outputs.

Three HCA facilities: HCA Houston Healthcare Medical Center, HCA Houston Healthcare West, and HCA Houston Healthcare Northwest – all within 40 minutes of each other.

Based on data from Health Strategy Associate’s Facility Assessment Tool, HCA Houston Healthcare Medical Center is superior across the board when compared to HCA Houston Healthcare Northwest and equal to or better than HCA Houston Healthcare West.

Versus West and Northwest, the clinical outcomes from HCA Houston Healthcare Medical Center are more than 2x the other two. The patients… AKA your clients… are more than 2x as content with HCA Houston Healthcare Medical Center and you/your boss/your board/your shareholders will be too when you pay less for higher quality care.

Again, higher quality facility at a lower price.

Shop Around! This dynamic occurs all over the country – check your utilization and your network to make sure you know just what facilities you are using. 


Cost Doesn’t Equal Quality

In the ever-changing world of healthcare economics, one thing is becoming more of a norm – high hospital costs. Crazy facility fees coupled with hospital/health system consolidation are leading to higher prices for payers.

Facility fees, viewed by some as the latest gimmick to generate additional revenue for hospitals, help hospital costs to account for upwards of 40% of countrywide workers comp medical expenses.

Making matters worse is hospital/health system consolidation.  Consolidation often leads to higher prices – The Federal Trade Commission’s Director of the Bureau of Economics said that some consolidated hospitals have raised prices as much as 50%. Consolidation/M&A took a bit of a pause during COVID but has reemerged and is expected to keep going due to financial pressures and desire to gobble up market share.

Workers’ comp is already vulnerable due to its inability to rival group health’s scale along with unfavorable regulatory dynamics…

As the smallest payer in healthcare, it is critical for WC payers to make sure they are utilizing high quality facilities with reasonable costs.

Consider the following example:

In Jacksonville, Fl:

Two facilities. 21 minutes apart, same side of the city center, but different profiles. The Mayo Clinic – widely regarded as one of the best hospital systems in the world vs. an HCA hospital – Florida Memorial Hospital.

According to Health Strategy Associates’ proprietary Facility Assessment Tool ©, the Mayo Clinic scores the same on Patient Safety, but much higher on Clinical Outcomes, Person Satisfaction, and Efficiency all while being SIGNIFICANTLY less expensive than nearby Florida Memorial Hospital.

*Higher the grade the better*

Using data provided by CMS and state entities and HSA’s proprietary algorithm to best reflect the medical treatment of worker’s comp injuries, the Tool enables adjusters and case managers to ensure patients avoid poor quality facilities and employers pay a fair price for excellent care.

For a demonstration of the Facility Assessment Tool, email JStithATHealthStrategyAssocDOTcom.


A.I.: The Basics

AI is all over healthcare, from assisting in diagnosis to evaluating new medicines, from allocating resources to triage. Sure, there’s enormous potential – there’s also big risks. At last fall’s National Work Comp conference AI was all over the exhibit floor….in recent surveys HSA has conducted we have seen a dramatic rise in AI-related comments.

What’s apparent from our conversations with industry execs is this: AI is…in the eye of the beholder.

While industry folks talk about AI’s potential, they readily acknowledge their understanding is superficial at best.

I asked Jay Stith, the brains behind HSA’s analytical work – he’s also worked extensively with AI applications in his work with HSA and on the national scale for disaster prediction and preparation – to give you, dear readers, a very brief overview of what AI is, how it “works” and where it might be useful.

At its core AI represents the culmination of efforts to infuse machines with human-like cognitive functions. The engine driving AI’s transformative power is machine learning – a discipline enabling algorithms to learn from data patterns. This not only facilitates automation but also empowers AI systems to continuously enhance their performance, making them dynamic and adaptable to evolving challenges.

This potential doesn’t come without cost. Once you decide to pursue AI, launching a competent AI system requires a lot of work:

• Determining what problem you want AI to address,
• acquiring the resources (money and infrastructure) ,
• earning management and staff buy-in,
• acquiring the talent to develop AI,
• assessing/cleaning up/revising the data used to “train” AI
• developing metrics to evaluate the AI’s output
• building the AI model/tool/program/etc. structure,
• adequately training the AI, and
• then…the dreaded implementation phase.

All while navigating the tricky ethical considerations associated with AI (privacy, ownership, algorithmic bias, hallucinations, and employee displacement) and the looming threat of increases/changes in regulations.

That said…safely navigating the path will lead to much improved productivity, clinical outcomes, and lower costs for all.

More specifically, stakeholders believe AI in worker’s comp can be very beneficial throughout the workflow –from the basics like increasing speed and accuracy across the board all the way to enhancing predictive analytic capabilities and most, if not everything, in-between.

What does this mean for you?

The potential is huge but be mindful of the arduous process to get there.