So, what should our FOURTH PARTY DECISION MAKERS do?

Let us address a common “wisdom” being espoused by decision makers of the Republican persuasion in Congress.

  • Greater transparency
  • More choice for consumers
  • Competition to decrease cost

 WHAT BASIS COMPETITION?[1]

What do these product lines look like?[2]

next-gen-blog6-Plan-Pros-Cons

1:  PRICE-The primary consideration

Why are we concerned about competition based on PRICE?

The raising cost of health care, currently $3.65 trillion dollars in 2018 or roughly $11,212 per capita.[3] And how does that impact the SECOND PARTY or Health care Consumer?

next-gen-blog6-2019 reality

2:  CONSUMER CHOICE.

Across most Snapshot communities, health plans competed on the basis of consumer choice on network breadth. This was the second most important basis of competition.

3:  ACCESS AND STYLE OF CARE.

In some Snapshot communities, health plans competed on the basis of perceived (as opposed to measured) access, interpersonal relations, and amenities.

4:  QUALITY OF CARE.

In general, there was almost no competition on the basis of measured and reported technical quality process or outcomes measures.

The Robert Wood Johnson Foundation’s Community Snapshots study, over the past two years health plan premiums either increased more slowly than in the recent past, were unchanged, or decreased. The bad news is the lack of competition based on measured and reported aspects of quality of care, especially health outcomes.[4]

Competition among health plans, hospitals, and physicians has taken place in fifteen health care markets primarily on the basis of price and secondarily on network breadth and style of care.  In most markets, competition resulted in:

  • lower (or slowly growing) premium prices
  • within a type of plan product, competition was leading to similar prices and networks and was reducing product differentiation among health plans.

Competition was not taking place on the basis of measured and reported quality of care.

This limited the capacity of employers and enrollees to make informed health plan choices.

As a result, there was a substantial gap between competition as envisioned by the architects of the managed competition model and competition as it is evolving today.

AND WHAT ABOUT MERGERS & ACQUISITIONS?[5]

next-gen-blog6-mergers-acquisitions

Database searches generated 7,559 articles, with 29 articles included in this review. Vertical integration was associated with 1) better quality (measured as optimal care for specific conditions) and 2) -showed either no differences or lower efficiency as measured by

  • Utilization
  • Spending
  • Prices

3) Few studies evaluated a patient-centered outcome. Most examined mortality and did not identify any effects across domains, most studies were observational and did not address the issue of selection bias.

“Despite what seems like endless discussion over the future of health care, politicians and the public have yet to diagnose the crucial problem within our health care system: it is completely devoid of real, market-based competition.”[6]

  • the type of competition that allows the highest-value providers to win and builds long-term doctor-patient relationships.

Most other products and services in the U.S. outside of health care are bought and sold in the marketplace give consumers relevant buying information and the sellers provide high-quality products at competitive prices to earn and retain the consumer.  This simply not present in the U.S. health care system. Because of this absence of transparent competition,”… doctors who outperform on both cost and quality still cannot effectively attract and keep patients better than the doctors who under perform.”

If competition may not be the best way to approach our American healthcare in transition, what would? Perhaps we need to take a look at other health care delivery models besides our current Multi-Payer model? Stay tuned for the next blog.

FOOTNOTES:

[1] adapted from Miller, Robert, “Competition in The Health System: Good News And Bad News,” Health Affairs, Summer 1996,

www.healthaffairs.org/doi/full/10.1377/hlthaff.15.2.107

[2] Masterson, Les. “HMO vs PPO vs Other Plans: What’s the Difference?” Insurance.com, 23 Oct. 2018, www.insurance.com/health-insurance/difference-between-ppo-hmo-hdhp-pos-epo.html.

[3] Sherman, Erik, “U.S. Health Care Costs Skyrocketed to $3.65 Trillion in 2018,” Fortune, 21 Feb 2019, finance.yahoo.com/news/u-health-care-costs-skyrocketed-141600154.html

[4] “Sentinel Communities: How Communities Work Toward Health,” Robert Wood Johnson Foundation, 2019, www.rwjf.org

[5] “A systematic review of vertical integration and quality of care, efficiency, and patient-centered outcomes,” Health Care Management Review: April/June 2019 – Volume 44 – Issue 2 – p 159–173

[6] Simeon Schindelman, CEO of Brighton Health Plan Solutions, “The Cure For Health Care Is Competition,” FORBES, 5 Dec 2017, www.forbes.com/sites/realspin/2017/12/05/the-cure-for-health-care-is-competition/#4fe4b23c52a1

By | 2019-07-23T11:19:14+00:00 July 23rd, 2019|Categories: Healthcare|0 Comments

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