The Basic Components of Solving the Cost Crisis in Healthcare

With the advent of the New Year there is even more attention being paid to healthcare costs. The financial crisis is driving business to reexamine every expense including health care.

In Washington there is much rhetoric about health care coverage but little serious discussion about how we are going to manage the cost. As Mr. Orszag, the congressional budget office head, has said: "The long term fiscal balance of the U.S. will be determined primarily by the future rate of growth of health care costs"(NEJM Nov.1st 2007). Because it is highly unlikely the government will manage these costs it is up to providers and employers to design new ways of delivering care and innovative ways of paying differently. This will require risk taking on both sides. It will require transparency of performance data. In Wisconsin a customer can now view on public websites mortality and many other quality performance indicators for certain procedures in any Wisconsin hospital www.wicheckpoint.org the average payment to the institution for that procedure www.wipricepoint.org and the quality of the physician group delivering that care www.wchq.org. Soon to come we will have physician resource utilization performance using ETGs or episode treatment groups derived from The Wisconsin Health Information data mart. That data set which includes 1.6 million members' claims data will allow accurate comparison of physician resource utilization in most markets. The data is being piloted around the state in different markets to be checked for accuracy before being released to the public sometime this year. Data will continue to be added to the data mart as new data contributors come on board.

Armed with the above information employers and the government can now work with providers to reduce cost and improve quality.  The place value is created is at the level where the care is being delivered. It is critical that the employers and eventually the government payors work collaboratively with providers to remove the waste and build a better delivery model.

This following article written by me recently appeared in Modern Healthcare.  It describes what employers and providers need to be focused on. 

John S. Toussaint, MD
President and CEO, ThedaCare Center for Healthcare Value
(920) 659-7500