The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

One Way to Control Medical Costs

Posted by Alan on September 29, 2008

With the inauguration of a new president next January, the health care reform debate will begin again. It will launch with at least one grand speeches, several huge rallies, and media events too numerous to count. Yet, what will really matter is when the new Administration brings together a broad group to begin hashing out a plan. When they do, I’m hoping a key focus of the negotiations will be on controlling America’s skyrocketing health care costs. As I’ve written about before, it’s the underlying cost of medical care that will determine whether health care reforms succeed.

So when the new President convenes his working group, I’m hoping there’ll be a couple of doctors from Pennsylvania in the room. Specifically, doctors from Geiinger Health Systems. It’s not that they’ve found the magic wand that will miraculously clamp down on runaway health care cost inflation. There is no such thing. What they have done, however, is demonstrated that the appropriate use of technology and the creation of a culture of appropriate care can have significant impact on costs.

As reported by Fast Company magazine, the Geisinger Health System has introduced a program they call ProvenCare. The program is built around a relatively straightforward idea: medical providers should do the job right the first time. If they don’t, they pay to fix it. It’s a way of taking “pay for performance” concepts to an extreme. At Geisinger, they charge a flat fee for procedures like coronary-artery bypass surgery — including all the pre-and post-operative care involved — and they warranty their work. In the event of a preventable complication, Geisinger pays for the costs of making it right.

This shifts the cost incentives with the health system from providing as much care as the patient can survive to providing the right care. The underpinnings of the program centers around technology. For by-pass surgery, they created an online protocol of 40 steps their staff is expected to follow. Doctors receive a bonus based, in part, on meeting all those steps. However, each item on the checklist isn’t mandatory. Physicians are permitted to make exceptions, they merely have to note the reason for any deviations.

Initial results are promising and Geisinger is looking to expand the program — including the warranty — to other procedures. What’s happening in Pennsylvania is not just an interesting story, however. What’s significant, is how it demonstrates the compatibility of reducing medical costs while maintaining medical quality. If the next Administration’s health care reform plan is to work, that’s a story that needs to heard.


3 Responses to “One Way to Control Medical Costs”

  1. Robert T said

    The recent debate around how to best control health insurance and the cost, has pushed the issue of prevention to the front. Why is prevention so important? It is important because the average person is overweight and running up the medial cost. If you look at the generations before us they were in much better shape and took care of themselves. Studies has shown that a person who is in good shape and has health insurance does not cost the government a lot of money. For those who do not cost the government more. Who is responsible?

  2. Jay Morey said

    The recent debate around how to best control health insurance and the cost, has pushed the issue of prevention to the front. It should be at the headline of every newspaper in America. Shifting the focus on what is really important in health insurance. It is important that we are more pro-active and prevention-oriented; we can make a major impact on common and costly chronic diseases such as diabetes and obesity. This can help to secure stability in health insurance.

  3. Cindy said

    Whoever came up with this plan certainly does not work in healthcare. It is amazing how easy these plans are to come up with when you are not working in the trenches. How can you
    “cookie-cut” healthcare? How can know when unanticipated complications will arrise? You can’t. Do you really want the doctors to consult a checklist to see if the treatment you need is on the list?

    You want to cut health care costs…control huge profits acquired by insurance companies and drug companies. No more golden parachutes and mega-bonuses. Put those millions back into the companies to help reduce the cost of medicines or back into the insurance companies so that more money can be paid out to cover health care costs and thus reducing the amount that the average person has to pay out of pocket.

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