Perspective of CIVHC’s VP of Research and Compliance & Chief Economist, Jonathan Mathieu, PhD

In September, CIVHC staff, along with representatives of four key Colorado stakeholder groups, had the great privilege to attend a National Affordability Summit hosted by the Network for Regional Healthcare Improvement (NRHI) in Washington, DC. The event drew more than 200 people from around the US to discuss why health care costs so much and what can be done to control spending. Key objectives of the Summit were to:

  • Gain a deeper understanding of health care cost drivers and innovative approaches to reducing spending, and
  • Learn how to leverage cost information to enable key stakeholders to take actions that contribute to greater health care affordability.

Colorado stakeholder attendees included: Adela Flores-Brennan, Executive Director, Colorado Consumer Health Initiative; Chris Klene, Project Coordinator, Center for Health Progress; Janet Pogar, Regional Vice President – Network Management, Anthem Blue Cross Blue Shield; and Sara E. Miller, Chief Executive Officer, Trailhead Institute. CIVHC staff attending the Summit included Ana English, President and CEO, Jonathan Mathieu, VP of Research and Compliance, Kristin Paulson, VP of Programs and Analytics and Tamaan Osbourne-Roberts, M.D., Chief Medical Officer. Several members of the Colorado contingent were able to attend thanks to financial support from the Robert Wood Johnson Foundation.

Overall Themes

Much of the early discussion focused on themes that will not surprise those familiar with the US health care system and its many challenges. Presentations emphasized that we are on an unaffordable, unsustainable and potentially ruinous path when it comes to health care spending. A common message throughout the Summit was that greater transparency, access to data and actionable information are fundamental to realizing meaningful health system change.

It’s the Prices!

Several presentations highlighted research indicating that health care cost and spending increases are mostly driven by price increases that greatly exceed the overall rate of inflation. Industry consolidation and lack of meaningful markets and competition, particularly in rural areas, were cited as contributing factors. The words “price gouging” and “extortion” were used in the course of these discussions. One stakeholder noted that practices such as balance billing for out of network services, unknown to the patient when those services are delivered, drive costs and spending increases and undermine trust in the system.

Economic Impacts

Others highlighted that health care costs are the largest single factor contributing to a lack of growth in wages and incomes for working families. Importantly, these presenters also noted that less spending necessarily means less revenue/income for many health care providers and payers. This reality must be recognized and meaningfully addressed in policy discussions and through thoughtful system redesign.

There is no Magic Solution

Incentives built into the current health care system encourage inefficient, ineffective and unnecessary use of many services. One presenter noted that incentives under pay for performance (P4P) programs are not really any different from traditional fee for service (FFS) going on to say that, “we have studied P4P to death and it does not reduce overall costs.” Other themes that emerged from this discussion included:

  • We cannot be afraid to try new things
  • If something is going to fail, let it fail fast
  • It is important to understand what didn’t work, and why
  • A mix of innovative approaches is necessary

How do we get to Affordability?

  1. Develop a health system that creates incentives for providers to deliver the right care, at the right time and in the right place. Appropriate incentives would help to decrease the amount of low value care delivered and reduce spending. Such a system would pay providers for keeping people healthy and improving their overall health.
  2. Implement policies that encourage payers to support innovative, patient-centered care delivery models through financial incentives to providers who are in the best position to try new things.
  3. Don’t let the perfect be the enemy of the good. One panel emphasized the importance of starting with the data we have rather than waiting for all that might be useful. Many successes in creating disruptive innovations in health care have leveraged existing, free and publicly available data sets.

As the steward of the Colorado All Payer Claims Database (CO APCD), CIVHC and our local partners, and other NRHI members nationally are uniquely positioned to leverage data resources and trusted relationships in local communities to help inform development of innovative approaches to reducing spending. Actionable analyses highlighting variability in health care utilization, spending and quality, can highlight opportunities as well as provide insights regarding which innovations generate the greatest impact in terms of better care and lower costs. Cost insights and more are already available on our website at http://www.civhc.org/get-data/ and more data will be available in each of these categories in the upcoming months.

We will continue to look for innovative ways to support local and national innovations in the health care space to truly get to the place where health care is affordable, accessible, high quality and patient-centered. We welcome your ideas and input on how we might support and partner with you in similar efforts. Please contact us at info@civhc.org and let us know how we can help.

Categories: BlogCIVHC Perspective

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