The Collective Appeal for Controlling Healthcare Costs

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As implementation of the Affordable Care Act moves forward, insurers and providers will need to continue searching for innovative ways to provide transparent, cost-effective healthcare.

As implementation of the Affordable Care Act moves forward, insurers and providers will need to continue searching for innovative ways to provide transparent, cost-effective healthcare.

Dr Kenneth Davis, president and CEO of The Mount Sinai Center, says that many hospitals intend to challenge the status quo of patient care by testing new healthcare models that provide cost savings. Such incentive models include Accountable Care Organizations (ACOs), or utilizing innovation grants, which help providers like Mount Sinai break away from the traditional fee-for-service standards in healthcare. Dr Davis explains that:

“These models require hospitals to go beyond the four walls of our institutions — to physician practices, health centers, nursing homes – and establish critical, new partnerships with other providers based in our community. As participating ACOs, we will bend the cost curve through enhanced services to support patients and care coordination in all of those settings. The goal is continuous care of the whole patient, rather than isolated — and inevitably more complex and expensive — episodes of care. There is financial risk in this new model, but we view it as our responsibility to embrace it.”

At Advocate Health Care in Illinois, accountable care has become synonymous with how they do business. Under their partnership with insurer Blue Cross Blue Shield, Advocate Health Care estimates patients’ costs within their ACO structure. If the organization is able to achieve cost savings while still meeting quality targets, they share that money with Blue Cross. However, if they fail to meet those requirements, they risk revenue loss. Annie Lowery of the New York Times reports that despite initial concerns, Advocate Health Care's move to an accountable care model has reduced hospital admissions by 6 percent, and lessened patient stays by 9 percent.


Additionally, it is not only doctors and hospitals that are embracing changes intended to improve healthcare delivery costs. Capital Blue Cross recently released a website tool that presents the insurer’s products in a detailed comparison format, allowing payers to reach better-informed decisions before requesting a quote, or applying for coverage. Similarly, the Centers for Medicare & Medicaid Services (CMS) began gathering data for their own website based on initiatives of the National Physician Payment Transparency Program. The CMS website will make information about financial relationships between medical professionals, providers, and drug manufactures available for public consumption.

“Three years ago, we challenged ourselves to save $100 million by focusing on how and what we buy to stock the hospital with needed equipment and supplies. The key was to meaningfully engage doctors. Now, as part of the purchasing process, dozens of doctors gather to discuss the merits of certain products: Which ones provide the best outcomes for patients? How many are needed? How much does it cost?”

Innovative healthcare requires participants to become better educated about the costs of medical supplies and procedures. Dr Toby Cosgrove of the Cleveland Clinic, recently told Time:

Dr Cosgrove also said that, considering the clinic’s success, it is realistically viable to have healthcare providers make judgments based on the most cost-effective practices. “Physicians, after all, are evidence-based decision makers,” he commented, “By supplying doctors with supporting data, change will come naturally. And so will the savings.”

Around the Web:

Engines for Reform: Changing How Hospitals Deliver Care [The Hill Blog]

A Health Provider Strives to Keep Hospital Beds Empty [NY Times]

Figuring Out Which Health Insurance Product to Choose is Made Easier with New Capital BlueCross Online Tool [Capital BlueCross]

New Website Will Disclose Health Industry Payments To Doctors [Kaiser Health News]

The Kindest Cut: How One Hospital Lowered Costs by Making Doctors More Budget Conscious [Time]