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Desperate times, desperate measures

The largest health plan trade group wants to form a new agency to “compare the cost and effectiveness of medical treatments as part of a series of recommendations to reduce health care costs.” (California HealthLine from CongressDaily) At first blush that’s pretty similar to what the Agency for Health Care Research and Quality is doing today.

AHRQ’s mandate is to “Build the evidence base for what works and doesn’t work in healthcare and develop the information, tools, and strategies that decisionmakers can use to make good decisions and provide high-quality healthcare based on evidence.” AHIP is looking to go further, to include cost in the equation.
Cost is something AHRQ and it’s antecedent, the Agency for Health Care Policy and Research, carefully avoided. And at the time, for good reason. AHCPR was almost killed off in the late nineties by forces ranging from budget hawks to back surgeons angry at AHCPR’s findings to politicians furious over AHCPR’s “role” in the Clinton health plan process.
Fortunately, cooler heads prevailed (who says nothing good ever comes out of Washington?) and the Agency was kept alive, although with a different mandate.
Now private insurers are looking to Washington for help managing health care costs. This is not your usual political hot potato, but rather one with a temperature akin to the surface of the sun.
What does this mean for you?
AHIP’s request for Federal involvement in health care cost issues is both an indicator of how desperate private insurers are and a recognition by those insurers that government has a key role to play.

2 thoughts on “Desperate times, desperate measures”

  1. I don’t see this as an act of desperation, but of opportunism. It has always been in the purchasers’ and payers’ financial interest to reduce expenses for drugs and treatments that don’t provide much bang for the buck.
    What has changed in the last few months is that electronic medical records now look like they are gathering enough momentum to provide the huge amounts of raw data at a low enough cost to make an agency like this much more feasible and effective than in the past. Large systems are already on board, with tens of millions of records available for automated analysis. Health insurers want this data to be analyzed, but they don’t necessarily want to be paying to do the analysis themselves. Also, if the government does it people are more likely to trust the results.

  2. Joe,
    With this value based purchasing as the foundation supporting an integrated national health strategy, the US can become the Healthiest Nation. One important enhancement is critical: the economic value of optimal health to the individual, employer, and nation must be included in the calculation; there is enough money!
    One notion of such an integrated health care plan:
    – Optimal health is the goal, and health outcomes are the key metrics
    – Financial resources are abundant but finite; spending must be directed to high value health enhancement methods, such as prevention; reimbursement must be linked to health outcomes.
    – Only a digitally driven healthcare system can affordably interrogate and amalgamate cost and outcome data to continuously improve quality and value of medical practice and personal health behaviors
    – The empowered individual becomes the basic unit of the health care system; a single community-owned shared marketplace serving the each individual is the basic organizational structure; government, healthcare institution, insurer or the health care provider systems are integrated with this shared system.
    – Aligned incentives for providers, payers and patients that favor health enhancement spending and behaviors are an essential element of the reformed system
    – Effective marketing of health is coupled with barriers to marketing of unhealthy products and services
    The Mechanisms:
    – A data-driven analysis of health outcomes is linked to an economic analysis of health care costs and of the economic value of optimal health to the individual, corporation, and our nation to allow value based purchasing of health care (see below); involvement of health professionals in this valuation process is critical, because much care can yet be fully defined by data.
    – A single insurance pool with standard policies that align provider and patient incentives for prevention and value based utilization, creating a level playing field for insurers to compete based on service and price
    – A single community-owned digital health infrastructure that improves transaction efficiencies and that is financed from the attendant commercial savings that provides patients, and their caregivers, with access to all their medical records; performs analysis of aggregated data to improve process quality and efficiency; and supports community wide health planning
    – Pluralistic funding of healthcare by government, business, and the individual that funds a responsible level of prevention and medical care for all legal residents and legal guest workers; premium healthcare purchases by individuals or commercial interests must use the public systems of care, but not consume public funds, and may include lower value services, cosmetic services, or standard services at greater convenience.
    – Use of corporate, government, faith-based, community, medical care, and virtual venues and cultures to (1) market health improvement, centered on individual healthy behavior decisions, and
    (2) improve efficiency of health care delivery and health improvement efforts,
    that is coordinated by a community health planning organization and supported by national efforts.
    – Legal, economic and cultural barriers created to unhealthy products / services and to the promotion of these destructive activities implemented at association, community, state and national levels.
    – Aggressive funding of community prevention and health planning that is built upon a digitally created individual health plan for each resident of the community and aggregated to assess population needs and opportunities.
    – Integration of social services and health organization efforts
    The Benefits:
    – The world’s healthiest population
    – The world’s most productive population, based on the strong relationship between optimal health and productivity, which creates higher living standard, which allows further health enhancements.
    – Improved satisfaction by patients with their healthcare and their health, increasing our national optimism and idealism
    – Greater professional control and work satisfaction by physicians and other healthcare professionals, which attracts high quality professionals who provide better care at the same cost.
    George Anstadt MD, FACOEM, FACPM
    Rochester NY

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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