For years, leaders within the health care industry and observers outside it have been saying that the U.S. system of delivering health care needs to move to a system that rewards health professionals for outcomes, not procedures. That day has arrived – long after it was due, but this change is upon us.
Consider two recent developments. As of Monday, Medicare will fine hospitals that readmit too many patients within 30 days of discharge due to complications. The change is part of President Obama’s health care reform law and is designed to improve quality of care while saving money for taxpayers.
Locally, Kaleida and BlueCross BlueShield of Western New York are instituting a new payment system for heart surgery. The insurer will pay the system one fee for all the services a patient receives, and make Kaleida accountable for all the care, from before the procedure until after a patient goes home. That contrasts with the predominant fee-for-service method of paying for care by having every doctor and facility separately bill for services.
Both changes are designed to improve quality of care, using money as an incentive. For Medicare, hospitals will lose money in cases of avoidable readmissions, while at Kaleida, doctors and hospitals can share in any savings from providing care in a more cost-effective way.
And they’re not alone. Catholic Health and its affiliated doctors have begun a program with Independent Health to offer a new option that lowers premiums in exchange for using a more limited number of hospitals.
The goal, says Joseph McDonald, president and chief executive officer of Catholic Health, is “to bend the cost curve aggressively.”
These are significant steps as the private sector joins the crucial effort to make health care more efficient. With health care projected to reach an unsustainable 25 percent of gross domestic product by 2025, it is critical to reduce its costs, or at least tame the rate of growth. As health care takes up a larger and larger percentage of the economy, less money is available to spend in other sectors, from food and housing to infrastructure and entertainment.
The problem is well-understood. It’s the solutions that have been elusive.
“With health care costs spiraling out of control, we need to do something to pull in the reins,” said Dr. Robert Gatewood of Buffalo Cardiology and Pulmonary Associates in Williamsville. “The change has to come from those who deliver the care. We need to lead the charge.”
Someone certainly does. As Henry Davis reported in The News last week, health insurance costs have risen more than three times as fast as workers’ earnings since 1999 – 172 percent versus 47 percent. That is not only unsustainable, it has already borne a high cost, as more and more employers pass along increasing health costs to employees or cut out their health insurance benefits altogether.
Health care reform has been an urgent need in this country for years, even though Republicans don’t think so and even though Obama and the Democrats passed a bill that gave short shrift to the necessary goal of reducing costs.
It’s good to see insurers and health care providers joining in. Their contributions are not only important, but indispensable.