Payment Reform, Dartmouth Atlas, and Entrepreneurs – Oh My!

This time around, it will be different. Right?  This isn’t capitation from the mid-90s.  No, this is risk-adjusted global payment tied to quality and outcomes.

Good. Great, even.  Heck, Massachusetts is on board. A number of the large insurers in Massachusetts have global payment contracts tied to their HMO providers.  In fact, the CEO of Blue Cross Blue Shield of Massachusetts, Andrew Dreyfus, is taking a strong stance with the hospitals and providers who do business with BCBSMA that aren’t currently participating in their Alternative Quality Contract get on board or else.

Clearly there is a push to change the current payment system.  The recent advent of Accountable Care Organizations (ACOs) is another vote in favor of payment reform.  By making doctors and hospitals eligible for shared bonus if they are “accountable” for the patient’s health, better outcomes will follow. (There may be an impact to patient choice, as well, but I digress).

So here you have a shift in how things have historically been done. It’s no longer business as usual.  It’s changing. And with change comes opportunity. 

I’m wondering if there are any business-minded professionals with entrepreneurial spirits that are looking at this push towards accountable care, global payments and the like and thinking, “Hmmmm….is there a way to game the system?”

Why, yes, there is!  Or at least there appears to be a way to stack the deck in your favor a bit.

Have you ever heard of the Dartmouth Atlas of Health Care? If not, take a look.  If yes, let’s continue with my example.

You are an entrepreneurial person with cash in your pocket and you want to invest in healthcare.  You decide to set up a new health center or hospital.  Providing you can get approval from the CON program in the area, one of the key considerations is where to set up shop.

Let’s go back to the map, shall we?  By searching a particular region one can look at a number of statistics such as hospital utilization, Medicare spending, hospital care intensity or physician utilization (to name a few).

Is it possible for a business-minded person to choose a location that would maximize his or her potential reimbursements under a global payment arrangement?  

Think about it.  If there is a region of the country that statistically and historically had a lower utilization of hospitals and doctors, fewer surgical procedures, high ambulatory care quality and strong patient satisfaction results…could one deduce that people in that region are not large consumers of care and, when they do, they are directed or geared towards less intrusive (read less costly) interventions?  AND the area has strong patient satisfaction and quality results?

Our entrepreneurial friend from my example would benefit from these new payment models due to better patient outcomes and better patient satisfaction results achieved through less intrusive and less costly healthcare interventions. Conversely, a doctor practicing in a high utilization area with poor outcomes may not view the push towards payment reform very favorably.

Does this sound far-fetched?  Maybe a little.  But the idea has merit. 

Is there a place in the United States, a Welltropolis filled with educated healthcare consumers who opt for less intrusive, less costly interventions before being put under the knife or being put on five different medications?

Is there a place where physicians utilize evidence-based guidelines for medicine more than another region?  A place with claims-based analysis of effective care helps determine what the next best step for appropriate medical care will be?

Boy I hope so. And I hope it’s within driving distance to my home.

Now if you’ll excuse me, I’m going to the bank to secure a loan to build a new hospital and figure out the best location for it.

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2 thoughts on “Payment Reform, Dartmouth Atlas, and Entrepreneurs – Oh My!

  1. Great blog! What I particularly like about ACOs is that we’re going to preserve choice and avoid all that nasty managed care backlash by telling beneficiaries they don’t have to enroll in anything and assigning them to the ACOs who are “accountable” for them after the fact, based on claims data. Oh, and if the beneficiary with heart failure (the most common reason for hospitalization of Medicare patients) had regular visits with her cardiologist, who carefully monitored her medications, weight and diet to prevent a hospital readmission, but she never saw a bona fide primary care doctor, um, er… Of course, if CMS decides that beneficiaries really need advance notification before being assigned to a coordinated system of accountable care, they can opt out and their utilization “won’t count,” because this isn’t managed care, after all. Right, that’s going to save a lot of money.

    Speaking of the Dartmouth Atlas and entrepreneurs, you left out the part about one of their core members founding the company Health Dialog, where he is a member of the executive management team while also being an academic. According to its website, “Health Dialog has its roots in academic research, with deep links to both The Dartmouth Institute and the Foundation for Informed Medical Decision Making. Each year, our team generates *commercially relevant* insights into healthcare cost and quality.”

  2. TJ, thanks for reading and thanks for the comment. I appreciate the feedback and the additional info!

    I do hope that we won’t have any backlash (patient choice or otherwise) while we look to curtail costs and shift the focus from procedures to patients. But we’ll see! I’ll continue to watch the evolution of the ACO!

    As for your comment about Health Dialog and David Wennberg, great point! Perhaps I will spotlight Health Dialog in my next “In Good Companies” series!

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