The longstanding belief that high-quality healthcare is more expensive may not be true. In fact, a new study suggests that high-quality medical care can be about 14 percent more affordable on average.
The report, released by UnitedHealth Group’s Center for Health Reform & Modernization and published in the September issue of Health Affairs, sheds new light on the opportunity to improve quality and efficiency in U.S. healthcare, and recommends four practical strategies for accelerating care provider payment reform to improve patient care.
The report, published in the special September issue of Health Affairs on payment reform and healthcare delivery, evaluated the cost and quality of care provided by approximately 250,000 U.S. physicians serving commercially insured patients across the country.
The UnitedHealth study may be the first of its kind to provide detailed national and regional data on variations in the quality and efficiency of care since previous research has focused mostly on Medicare patients.
Episode costs for a set of major medical procedures vary about 2.5-times, the study found, and episode costs for common chronic conditions vary widely – about 15-fold. Among physicians meeting quality benchmarks, the study found that there is virtually no connection between average costs and the measured level of care quality across markets, suggesting that higher cost areas do not necessarily provide higher quality care.
Researchers focused on a set of common chronic conditions – including asthma, diabetes, hypertension – and major medical procedures like catheterization, arthroscopic knee surgery, and vaginal delivery.
The study also found that episode costs for physicians who earn both quality and cost-efficiency designations are, on average, about 14 percent lower than costs for other physicians across all of the specialties included in the assessment program. This suggests that changing incentives through payment reforms could help improve performance.
“This research shows that for families across the nation, high-quality care can indeed be more affordable care,” said Simon Stevens, chairman of the UnitedHealth Center for Health Reform & Modernization, executive vice president of UnitedHealth Group and one of the report’s co-authors. “But these results underline the urgent need for effective new payment incentives, combined with appropriate support for dedicated care professionals, if the country is to capitalize on the scale of the improvement opportunity this research reveals.”
The study’s findings could have implications for a wide range of payment reform initiatives, including primary care medical homes, accountable care organizations, and episode-based payment approaches.
Drawing on UnitedHealth Group’s experience in testing and scaling these models, the Health Affairs article offers four practical improvement strategies to accelerate payment reforms that aim to address lower costs and quality care:
- Continue improving the sophistication of quality measures. The authors advise that leading health-related organizations “need to continue expanding the scope of evidence-based and physician-endorsed measures, including patient-reported outcome measures to help capture changes in patients’ health.”
- Expand and share data to encourage more granular performance analysis.
- ‘Customize’ payment reforms to recognize that care providers and communities are at different stages of readiness for new payment models, so a “one-size-fits-all” approach will not work. However, the Health Affairs article suggests that “most doctors and hospitals should be ready to adopt ‘performance-based contracting,’ which largely maintains existing payment methods but ties payment increases to performance on specific measures of quality and efficiency, such as readmission rates or prescribing rates for generic drugs.”
- Help doctors and hospitals by providing tools and other support, not just new incentives. “History has shown that simply promulgating new performance-based payment incentives will not by itself ensure that care improves,” the article says. “To succeed under new payment arrangements, hospitals and physicians will need to have in place strong governance mechanisms; effective financial systems…and a robust set of clinical programs that they can employ to help manage their patients’ care and support patients in managing their own health.”