Published in New Jersey Business Magazine
May 11, 2015

The cost of health insurance continues to be the biggest issue facing New Jersey employers. Businesses remain committed to providing health benefits to their employees, but rising costs seem to make it harder to do every year.

For Linda Schwimmer of the Health Care Quality Institute, the way to control cost is to find value in health plans. In a presentation to NJBIA’s Health Affairs Committee called “Searching for Value in Healthcare: A Quixotic Quest,” Schwimmer showed that the price sheet alone does not tell the whole story. What is needed, she argued, is a way to rate healthcare providers on overall value.

Assessing value means adding quality into the equation.

“If we don’t make sure that quality is integral to efficiency and cost savings when we’re talking about value, then this whole movement in healthcare reform is going to fall flat,” Schwimmer said. “It’s going to be rejected by patients, by consumers, by purchasers and by policymakers.”

Rating value is harder than it appears. For instance, patient satisfaction surveys of hospitals would appear to be a good measure, but more often, those ratings are based on comfort and aesthetics. Schwimmer showed an email advertisement from a robe company, saying comfortable robes could help improve a hospital’s patient satisfaction ratings.

“If the focus is on cozy robes, then I think that we really are in trouble,” Schwimmer said. “That’s not what value is all about.”

At the same time, value does not have to be more expensive. In fact, in the long run, better quality of healthcare would save money because there are fewer complications and fewer readmissions. Also, value can be gained with more of the human touch, like simply spending a little bit more time with the patient.

That is the idea behind accountable care organizations (ACOs), where providers are compensated based on a patient’s outcome rather than for each individual service. That motivates the providers to weed out wasteful costs (one ACO, for instance, discovered it was paying four-times the going rate for ambulance services), but at the same time, focus on providing the best care.

Several resources are available to assess different aspects of hospital quality, such as theLeapfrog Hospital Safety Scores and Healthgrades, but there is no source for rating overall quality.

Yet.

Schwimmer’s organization is developing a system to rate value of different providers. Once the system is operating, consumers would be able to see who has the best outcomes for, say, bariatric surgery, and then access their healthcare plan to assess the costs.

She stressed that it was the beginning of a long process.

“It’s something that’s futuristic and with many stages, but that’s where we would like to see this go,” Schwimmer said. “We don’t want it to simply be ‘this is the lowest negotiated rate.’”

Read the original article here: http://njbmagazine.com/trenton-talk/assessing-value-in-healthcare-the-quest-of-the-health-care-quality-institution/