Executive Summary

Accountable Health Plans

George C. Halvorson
President & CEO of HealthPartners

March 1996

One hundred and forty-two physicians were all given one patient to diagnose and treat. The same patient was seen by all 142 physicians. The result? Eighty-two different treatments.

Why did that happen? Because a doctor may have graduated from medical school last month, last year, or two decades ago. The doctor may or may not have attended a seminar or read a recent article on that disease.

How can we create more consistency, higher quality, and better outcomes in our health care delivery? By using systems thinking and rewarding the best performers.

We need to start comparing the health outcomes achieved by systems of care with the health outcomes achieved by competing systems of care and letting consumers choose between competing care teams based on care outcomes, patient satisfaction levels, care quality, and cost.

Our purchasers and consumers should know what health system gives them the best chance of surviving a heart attack - or detecting cancer at stage one. They should now what health system gives them the best chance of avoiding the pain, heartbreak, and expense of premature birth - and what system immunizes its high-risk patients in time for flu season.

Buyers should be able to compare the price of competing health systems with their results. If and when this happens, the marketplace will force health systems to focus on both costs and provable quality and will reward the best caregivers for doing the best job.

This outcomes comparison can not be done with sufficient validity on a doctor-by-doctor basis. Every physician's practice is subject to normal statistical variations that can make a given doctor look like an outcome hero one year and a wasteful care abuser a year later, particularly if the data used to evaluate the doctor are based on small (and statistically invalid) subset of the patients he or she sees.

To be meaningful and useful, most outcomes information has to be collected and gathered on a provider team basis - with each team accountable for micro-managing the practices of their individual providers toward the common goals of quality and efficiency.

If this occurs, then the potential cost savings in this country are immense. Every test, procedure, prescription, and treatment will be measured against quality of care provided rather than amount of revenue generated.

The trick is to align the incentives of the buyers and the caregivers.

For this approach to work, five things must be true:

1. Purchasers must take the lead in accomplishing this level of reform. Providers of care in the U.S. - for the most part - are doing very well financially with the current system. They also enjoy functioning as independent businesses, with little or no obligations to any other business entity in the provision of care.

2. Purchasers and consumers must reward their best performers by actually giving them patients. Like any other economic system, the health care industry will deliver what it is paid to deliver, and if buyers continue to reward procedures over outcomes, we will continue to see and escalation in the number and cost of procedures.

3. The quality and outcomes must be valid and verifiable. Reporting standards need to be established that are subject to audit and verification.

4. Provider systems need to be prepaid for serving entire populations - not just individuals - in order to maximize the connection between provider efficiency and health outcomes.

5. Competition between health systems is necessary to reward the systems for maintaining acceptable levels of service and for continuously improving care and efficiency. If a single care system dominates a major market, then that system will be able to become an insensitive, inflexible bureaucracy - and that would be a major disservice to the public it serves.

The signs at the crossroads are visible now. Let's choose quality over regulations, outcome over fee caps, and efficiency over penalties. Let's make the system affordable by applying appropriate incentives with logical structure - and avoid a world of wasteful bureaucracy.

We can either reform the system, or regress. Let's do it right. Everyone will win.

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