Fixing health care hinges on data, transparency
Fixing the nation’s broken health care system is clearly contingent on the strategic use of data as well as transparent cost and quality information across the medical supply chain.
But realistic expectations are needed along the way to achieving better results. Asked about President Trump’s latest executive order requiring hospitals to disclose their prices, for example, E Powered Benefits Founder and CEO David Contorno sounded skeptical.
“What we need desperately is an improvement in quality and a decrease in cost, and I can’t find one example of something our government has taken over in which that has occurred,” he told attendees.
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Contorno, who was part of a committee that helped formulate legislation with this intent in mind, cautioned that any such effort to achieve transparency could look very different after industry lobbyists weigh in and a bill gets to the floor of the Senate and House. He also noted how difficult it is to disclose pricing when “every hospital probably has 30 to 100 different prices for the exact same thing… Which of those prices are they going to publish?”
Crunching the numbers
Irrespective of government intervention, he believes any substantive fix “is going to come from brokers and consultants, and thereby, ultimately, employer demand.” It starts with data mining and ends with meaningful measures, he added.
“I think in order to leverage the data, you have to be able to get the data,” said Lester Morales, CEO of Next Impact, LLC, which recently branded a new data-driven solution for brokers and advisors to offer their employer clients called Transparent Health Benefits. He suggested that industry producers stipulate in their requests for proposal the terms under which vendors must provide data for their clients.
“If they win the business and therefore then sign the contract, it is now a contractual obligation for them to get the data,” he explained.
That scenario would have been very helpful for Walmart, whose health insurance carrier rebuffed the world’s largest brick-and-mortar retailer when it requested that the bottom-performing 3 percent of doctors be removed from its network, Contorno said. The official response was that doing so would have violated contractual terms, a troubling pattern seen with BUCAH plans that have been criticized for being stingy about sharing even data collected in aggregate form.
Jim Blachek, co-founder and principal of The Benefits Group, LLC, recalled how a 175-life self-funded client’s carrier issued the same denial. “It just blew my mind,” he said. “The employer felt that they should have access to the data, but it’s been like pulling teeth out of a chicken. They’d even gone to the extent of hiring a C-level employee at $90,000 a year to be able to manage that data.”
These examples could be a reflection of where the industry currently stands. The fact is that employee benefit professionals have been slow to implement push-button use of information technology to scrub employee data as well as garner more meaningful insight and measurement, according to Grant Gordon, CEO of Artemis Health, sponsor of the webcast, which was moderated by Eric Silverman, founder of Voluntary Disruption.
“It’s hard to tell if your programs are working or not,” he said. “There’s just a ton of friction here, and I think there’s a new generation of data companies that are trying to change the game.”
Lowering the cost of health care is contingent on controlling the frequency and severity of claims, Morales noted. For example, he cited a $50,000 difference between the per-employee-per-year cost of a diabetic who complies with treatment protocols and a noncompliant diabetic. If seven such plan members are involved, Morales said “we’re talking about $350,000 of claims cost you could manage, not by eliminating that person from being a diabetic, but by getting them to be a compliant diabetic.”
The frequency of procedures performed at health care facilities is also a key metric to consider when assessing outcomes. Contorno worked with a network of precision gynecological surgeons, all of whom do a minimum of 300 hysterectomies a year. “They have 90 percent plus laparoscopic rate, and we have a bundled case rate with them of $11,000 versus the average of $38,000,” he said. That amount includes any postoperative complications of follow-up care.
“It’s important that health care data be used to drive quality, which will lower the cost of care,” said Blachek. He added that employers must “act on the data before conditions get to a point where quality of life is diminished.”