If you follow trends in the health insurance and healthcare industries, the news is not always positive - premium rates are increasing, healthcare costs are skyrocketing, and businesses are making big decisions about offering and sustaining coverage.
But here’s a silver lining - a case study reported on by Kaiser Health News (KHN) highlights an Affordable Care Act payment reform success story. The case study demonstrates how - at least in one case - educating and incentivizing doctors to take a more holistic approach to medicine can have a significant impact.
The case study
As reported on by Jay Hancock in a recent KHN article, Baptist Health System in San Antonio is an example of how a more holistic approach to medicine can yield increased patient success and cost savings.
As part of the Affordable Care Act (aka Obamacare), the hospital group worked with Medicare to take responsibility for the whole process of knee and hip replacements, rather than managing only what happened in their facility as they had done in the past.
According to Hancock, “Then Medicare lowered the average amount of what it pays for all that care by 3 percent, giving Baptist a lump sum for each patient getting the procedures. If the system and its orthopedic surgeons reduced costs below that price, they could keep the difference and divvy it up so long as quality didn’t suffer. If costs went up, Baptist was on the hook.”
The results of a more holistic approach were simple, effective, and profound.
- The doctors were trained on finances and were incentivized to lower costs. Now, the doctors had a stake in the financials. The result? They became more informed and “discriminating shoppers.”
- Because of the doctor’s attention to costs, metal hip and knee replacement vendors lowered cost to stay competitive.
- Additionally, doctors were less likely to unnecessarily recommend physical therapy, home nurse visits and temporary nursing home stays after the surgery - which encompass nearly half of the related medical expenses.
One significant reason for the increasing medical costs in our country is that doctors and patients alike are distant from the true cost of medical procedures. As a result, doctors and patients do not act like informed consumers. As this one case study suggests, the simple act of educating and incentivizing doctors to take a holistic approach to medicine can work to increase patient success and lower overall costs.
I believe this idea of education, consumerization, and holistic thinking can be applied to employee health benefits as well. What do you think? What are your takeaways? Leave a comment or question below.