Transparency: It’s The Only Thing That Enables Markets To Function

Submitted by hci3-usr on Friday, September 16, 2016 - 12:31

Newtown, CT – September 16, 2016

“There may be benefit for individual physicians to understand actual care costs (not charges) and outcomes achieved for individual patients with defined clinical conditions.”

Vivian S. Lee et al,
JAMA. 2016;316(10):1061-1072. doi:10.1001/jama.2016.12226.

In this week’s Journal of the American Medical Association, Vivian Lee and colleagues report on a year-long study of the effectiveness of providing front line clinicians with information on the actual cost and quality of care delivered, focusing on specific conditions and treatments for which there was an observed high degree of variability at baseline. Unsurprisingly to us, the pilot shows significant improvement in both costs and quality outcomes, demonstrating (once again because it’s not the first time) that we can, in fact, have our cake and eat it too. Better quality outcomes and lower costs of care can and do go hand in glove when physicians are put in charge of the episode of care, responsible for financial and clinical outcomes. The key, of course, is to provide them with rapid cycle feedback loops on both streams of data. Our recently released case study on a pilot total knee replacement episode of care payment program shows this very clearly as well.

What this means to you – In an accompanying commentary, our friends Tom Lee and Michael Porter make several important points about how to significantly leverage and further expand on the reported pilot. We hope that many health systems will pay attention. However, from the results of Medicare’s ACO program it certainly appears as if only the physician-led ACOs are able to take the important steps to plough through care reengineering, supply chain management, and outcome optimization. That’s because they don’t really care if the net result of those efforts reduces bed days, and idles hospital capacity. That’s more of a problem for organizations that carry those assets on their books. But one of the essential points made by Vivian Lee and her colleagues, the one that is captured in the headline of this note – and that is almost a: Really?? You think so??? – and that can rapidly accelerate transformation, irrespective of the underlying willingness of the entrenched institutions that control the industry, is the existence of cost and quality feedback loops. In simple terms, transparency. It’s the only thing that enables markets to function and, surprise, surprise, surprise, it works. So let’s double down on those efforts because I don’t think we need to rediscover in another couple of years, in yet another peer-reviewed paper, that physicians, armed with the right information, can both reduce costs of care and improve quality outcomes. We know they can. So let’s help them get it done.


Francois Sig


Francois de Brantes
Executive Director