Quality and Novel Delivery Models

We talked extensively about informed consent, and a key question was raised: “if true informed consent and shared-decision making occurs between providers and patients, will that reduce revenue?”

Although the question on this is a difficult one to answer, my thought is to say no. Along those same lines, Dave Mayer also commented that one group, particularly at MedStar Health, that has been on the forefront of improving processes has been Orthopedic Surgery. They have realized the paramount need to reduce variation in their practice patterns. As they say: No outcome, no income.

I wanted to comment particularly about a growing model of delivering care to patients, particularly with complex and semi-elective surgeries. This particular model is called Employers Centers of Excellence Network (ECEN). It basically is a form of value-based purchasing in which large companies such as Lowe’s, McKesson, Wal-Mart participate. If one of their employees needs a procedure such as a hip replacement or spinal surgery, their health plan will pay for all their employees’ travel and medical costs to have the procedure performed at several centers of excellence. These include Johns Hopkins, Virginia Mason, and Kaiser Permanente in Irvine, amongst several others.

Employers in this value-based purchasing model found that this reduces variation in care and cost, provides high-quality and safe care, and lowers downstream costs via the bundled payment model. Another reason I comment about this model is that it also seems to (at least anecdotally) reduce unnecessary procedures. These centers of excellence were selected on quality and outcomes at the individual surgeon level, as well as complication rates, training, experience, and patient satisfaction. These programs are reimbursed in a bundled payment fashion, as well as on patient outcomes as to reduce the incentive for simply increasing the volume of procedures.

Although this value-based purchasing model can likely only work for certain procedures, this illustrates a novel method of employing excellent medical care while reducing the number of unnecessary interventions.