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Healthcare Patients Want ‘Good Value’ for the Money

Cost +Quality = Value

…we are now entering into a new era in healthcare that appears to alter our behaviors toward the care we are receiving…

Similar to national data, Iowa spending on healthcare and insurance premiums has risen at historically lower rates in the last three years. However, according to the Kaiser Family Foundation, only three percent of Americans said health costs are “going up slower than usual,” and 52 percent said costs are “growing faster than usual.”  The other 35 percent say costs are about the same.

The amount that Iowans with employer-based health insurance pay for premiums has risen 167% in the last 14 years, while Iowa weekly wages have risen about 40%* and general inflation 43 percent. As we know, our incomes are suppressed by increasing health premiums, which certainly impact take-home pay and, ultimately, our capability of making consumption trade-offs for other priorities, such as food, shelter, education and retirement savings.

In addition to the premium cost, Americans are asked to pay increasingly more of the medical care they seek, through higher deductibles, copayments and out-of-pocket maximums. With lower-relative income, finding the financial resources to pay is problematic for many employees, causing them to put off receiving care or incur more medical debt.

In a recent Wall Street Journal article, Drew Altman, president and CEO of the Kaiser Family Foundation, wrote that Americans with health coverage care about:

  • Their premium costs, or the share of premiums they pay if they have employer coverage;
  • Their deductibles and other forms of cost-sharing, especially when deductibles have been rising steadily;
  • Their drug costs;
  • Whether they can go to the doctor or hospital they want without having to pay more;
  • The hassle and red tape in healthcare and health insurance. People care about getting information to be informed about their health and make smarter insurance and healthcare decisions;
  • Seniors care a lot about Medicare and sometimes vote on this issue.

Most people would agree to this list.

However, Mr. Altman then mentioned that “Americans don’t care as much as experts do about improving quality and eliminating unnecessary care. In general, people think that quality is good and they want more care not less.”

Perhaps this was true in the past, but we are now entering into a new era in healthcare that appears to alter our behaviors toward the care we are receiving. One prime example is a recent study that says cost is not the most important determinant of the care we seek – it is quality. From this report, when patients are provided hospital safety score grades and cost information together, they will choose safer hospitals 97 percent of the time, REGARDLESS OF COST.

Of course, this may also depend on WHO pays…the patient or a third party.

Making sure that such report cards reflect the most relevant performance measurements will be extremely important – if not critical – to the patient. Unfortunately, we don’t have this luxury at the present time. A March article on the Johns Hopkins Medicine website reports that national rating systems on the quality and safety of hospitals are too confusing because each will stress different measures from each other – sometimes providing a wide variation of grades on the same hospital (study source: Health Affairs).

In my blog last August, I wrote that the Urology Department at Cleveland Clinic received a top score by the U.S. News & World Report, yet received the lowest possible score by Healthgrades for prostatectomy outcomes. This type of reporting will only serve to confuse the general public before seeking care.

As healthcare delivery and payment initiatives continue to morph, look for quality and safety measurements to emerge with the cost component. The convergence of reliable safety and quality information with ‘real-time’ cost information can eventually catapult the healthcare industry into the 21st century.

Until then, many hurdles must be successfully cleared in order to achieve the desired value we all want.

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*2014 data from the Iowa Workforce Development is not yet available, and therefore, excluded.

Trust, but Verify

David P. Lind Benchmark“Fair and balanced.”

You hear this phrase from many different sources. It conjures up something within us that we all desire to have when making critical decisions. Understanding the pros and cons on any given issue is important to most of us. But do we really receive the “truth” or the “transparency” that will allow us to draw our own conclusions on the subject matter at hand? It really depends on the source of the information…so I believe.

The reason for this particular blog stems from a presentation that I recently gave at the “2012 Iowa Employment Conference” in Altoona. Much of my presentation focused on the health insurance trends in Iowa based on our annual studies. The trends by the way, are dismal at best, unsustainable at worst (another blog for later). When discussing potential solutions for employers, a few topics were breached such as consumer-driven health plans, wellness initiatives, and health reform measures. I mentioned that each topic will usually have many arguments (both pro and con), in addition to having both intended and unintended consequences. To know the subject matter well, I suggested to the audience to have a comfort level with their SOURCE of information (publications, media outlets, research organizations, etc.).

Much to my surprise, a hand was raised that followed with this question: “Which sources do YOU trust?” This question came out of the blue for me, but was asked in a thoughtful manner. I don’t quite remember my response that day, but since that presentation, I have had time to further reflect on this question. The word ‘Trust’ is defined in the Merriam-Webster dictionary as “assured reliance on the character, ability, strength, or truth of someone or something.” Another definition is “one in which confidence is placed.” I like both.

Regarding health care related stuff (including health insurance programs offered by employers), I TRUST a few particular sources. Each source has earned my trust over the years due to consistent research that attempts to factor out biases that typically are inherent in any type of research. Also, the authors of such research will generally disclose any potential outside influences that may mitigate the truthfulness of the results.

In no particular order, my short list of trusted sources is found below:

  • Health Affairs Journal – Many authors (national and international experts) write thought-provoking articles on highly researched thematic topics each month.  This is the gold standard because the information is fresh and relevant at all times. I also download their free podcasts and listen to them while I run in the morning. A subscription is necessary for this journal…but it is well worth the investment.
  • RAND Corporation – RAND provides objective research on many issues, including healthcare. Rand provides very innovative material…much of it can be found on their website at no cost!
  • Kaiser Family Foundation – Most information is at no cost…and there is a ton of information on many different health topics. A great go-to source!
  • Dartmouth Atlas of Health Care – The pioneer on the disparity of health care delivery in the U.S.

There are other sources that I highly value, but those sources (at least in my view) tend to be a level below the four mentioned above. Just know that the SOURCE of information is just as important as the content of the information being conveyed.

President Reagan adopted a signature phrase and made famous when discussing U.S. relations with the Soviet Union:  “Trust, but verify.” This phrase can also be applied to healthcare information and many other topics!