HCI3 Update from the Field – Newtown, CT
The time gap between knowledge acquisition and formal dissemination of that knowledge in peer-reviewed journals is maddeningly long – especially in an environment in which solutions are desperately needed today. This week we found out that some of our research will be published in early October in the American Journal of Managed Care. The study reveals what we've known and seen in our work for some time, namely that much of the variation in episode costs within a plan's network comes from the costs of Potentially Avoidable Complications (PACs). This is particularly true for chronic care episodes, but it also holds true for many procedural episodes. What we also find is that this variation is masked when simply comparing average episode costs between plans. Because when you're looking at a plan's average cost of a diabetes episode, it's just that, the network average, and that network average hides the variation within the network. So comparing inter-plan variation in episode costs is not particularly useful, even if it does reveal differences. It's the intra-plan variation that is revealing, and it reveals that PACs are a problem that needs to be addressed.
What this means to you – What we're talking about here isn't brute cost compression, but rather the gradual reduction of complications that cause payers to incur higher costs than they otherwise would, and cause patients to incur potentially harmful events that they otherwise shouldn't. It's one of the reasons the NQF endorsed our definitions of Potentially Avoidable Complications as comprehensive outcomes measures. And our new study, when it's published, will show why this is often where we should focus our collective attention. Of course, that's what payment reform is all about, but that's also what has pushed the transparency movement so forcefully this past decade. And the impending release of Medicare data to qualified organizations should help speed up both transparency efforts and payment reform. Our pilot sites are already engaged in all of this activity, and more are coming on line. At this point, the question for all others is: How much more evidence do you really need before you finally get your head out of the sand and aggressively shift away from fee-for-service? Come on. Even the peer-reviewed process is moving faster.
Francois de Brantes
Health Care Incentives Improvement Institute, Inc.