Patients need pay for performance too

The ultimate cure to the perversions inherent in U.S. health system economics is cracking the risk code – optimizing the financial risk allocation for any given disease across payer, health system, physician and patient. After years of payer and more recently health system effort, the heat is increasing on doctors and patients.

Despite vigorous effort on wellness and prevention, it’s fair to say the industry has so far missed the mark when it comes to enabling patients to take on more responsibility and risk related to their health care decisions. Payers and providers have an opportunity to make a more direct and immediate financial connection to each patient’s well-being – but must address three proximity challenges: data, money, and time.

  • Quality + cost + stakes = informed patent. Patients today are at a serious disadvantage when it comes to information about providers and services. Searching a payer-sponsored web site for surgeons you may find Dr. Smith gets five stars while Dr. Jones gets three stars. But what does that really tell you? Most likely that Dr. Smith is more cost effective for that payer. Transparency engine solutions may allow price shopping, but how much will you really know about quality comparisons? Most importantly, patients need better to tools to understand the cost vs. quality stakes. While an ingrown toenail pull vs. bypass surgery may be straightforward, most decisions are complex, and patients need meaningful decision support.
  • Connect the financial dots. Overall we need to create closer proximity between out of pocket healthcare expenses and personal decisions. Good intentions of government-sponsored care have shielded Americans from the risks of their lifestyles. Now, payers are tightening their wallets while healthcare is getting more and more expensive. Deductibles and out of pocket expenses are going up, and patients are feeling it more. However, instead of making the connection that improved health might result in less expense, many individuals will instead choose to avoid necessary care until forced to seek it in an emergent and high cost setting – exactly the opposite of what needs to happen. Shifting costs to poor lifestyle choices will never work as long as the emergency room safety net is in place. Instead, a combination of positive and negative reinforcement is needed. Direct financial incentives need to be connected to positive choices – premium savings and cash back for achieving good health milestones. In addition, the extent of safety net services must be scaled more rigorously in accordance with lifestyle decisions.
  • Make the future now. If patients are following through on appointments, wellness programs, screenings, etc., and the financial hurdle on those services is low or non-existent, they may ultimately see the reward of lower personal costs now and down the road. But in reality it takes a long time to demonstrate that. It’s challenging for Americans to think long term about their health because poor decisions and chronic pathology can be separated by decades. We need to build models that show patients the impact of making good health decisions now. High deductible plans still fail to allocate risk appropriately. With the wealth of data we now have on chronic disease, can we not build opt-in health plan models based more on variable rates of coverage for lifestyle decision related disease?

Think of it as pay for performance for patients. With everyone else in health care up in arms over rising costs, it’s time we mobilized patients more effectively for the same reason.

Matt Patterson is Senior Vice President, Business Transformation, AirStrip and a former U.S. Navy physician.

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  • TuckerBenson

    Dr. Patterson’s writing style is a bit opaque. Why not just come out and say fat people and smokers should pay higher premiums?

  • http://twitter.com/FerkhamPasha Ferkham pasha

    Interesting article

  • Docbart

    Right, take away the safety net. Herbert Hoover redux. Didn’t we learn that lesson already?

  • http://www.facebook.com/people/Jaywant-Nitturkar/1759681748 Jaywant Nitturkar

    It is a known fact that 80% of healthcare dollars are spent on 20% of the patients…so it will simply be fair to have people who rarely use medical services to pay less in premiums. Also, the only way patients will incentivized to take responsibility for their health is if they get direct financial incentive to reduce their BP, BMI or any other risk parameter. Otherwise we will continue on the path of bankrupting the whole healthcare system.

  • meyati

    I loved the comment about Internet doctor ratings. I went to one site, and one of the worst doctors I met was a 5 star. She wanted to treat the symptoms of a bad thyroid, but not the thyroid. I went out of range. I took the lab work to the clinic director. One of the best doctors that I’ve had, is rated about one star. he’s not a Chatty Cathy-and always seems preoccupied. I don’t mind a deep thinker-On several blogs this was discussed-and we decided that we’d get the doctor with the least stars. There’s more to meds than the doctor being your friend and entertainer-also the quality of the nurses should be a factor. The bad doctor’s nurse weighed me in as being 8-12 lbs heavier than I was. I had to go to a dietitian, get weighed, then hustle over to my bad doctor to get weighed. I was told to stop eating donuts, which sets off severe IBS.

  • http://twitter.com/hospitalrad Hospital Radiology

    Employers can have a positive impact on getting patients engaged in their own health and care. Our company incentivizes employees to take greater responsibility for their own health. We have an onsite Healthcare Wellness Clinic and can see a Nurse Practitioner free of charge for sick visits, prescriptions, immunizations, or medical advice. The provider conducts a health assessment and creates a Health Report Card and a Healthy Life Plan for each employee. If we comply with the ‘Life Plan’ we are eligible for a significant rebate on our monthly health insurance premiums.

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