Saturday, July 12, 2014

Buying Care

I have always been skeptical about the popular idea that healthcare would be better if consumers (i.e., patients) had an incentive to pick providers based on cost and quality.
One reason for my skepticism is that the psychology prevailing at times of illness or injury doesn’t seem to me to be conducive to cool judgments about where to get care. 
Another was illustrated by a front page story in the July 6 issue of the Omaha World Herald headlined Best bang for buck at hospitals is no easy call.  It seems that Blue Cross Blue Shield of Nebraska is asking Alegent Creighton Health hospital and physicians to lower their rates which, it claims, are some 10 to 30 per cent higher than those of comparable systems.  Alegent claims the difference is justified by higher quality which reduces things like complications and re-admissions.
The World Herald tested the claim by comparing ten systems in the area, using 20 Medicare price and quality measures.  Based on the evidence, as shown in 12 lists and 12 bar charts, the World Herald decided that the insurance company’s claim was justified, but took a full page of text to explain its conclusion.
Even so, the article conceded that there was evidence on both sides of the issue.  For example, each of the ten hospitals ranked first in one category.  Seven ranked last in one.  Imagine, then, a patient faced with a medical need trying to go through a similar process.  Creighton, the hospital that gave rise to the issue, ranked first in four categories and last in five.
If we want to employ market forces in an attempt to make health services both better and more efficient, I think there is no avoiding dependence on insurance companies to develop packages that they claim offer the best value and then convince consumers that they are right.



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