One Way to Control Medical Costs

With the inauguration of a new president next January, the health care reform debate will begin again. It will launch with at least one grand speeches, several huge rallies, and media events too numerous to count. Yet, what will really matter is when the new Administration brings together a broad group to begin hashing out a plan. When they do, I’m hoping a key focus of the negotiations will be on controlling America’s skyrocketing health care costs. As I’ve written about before, it’s the underlying cost of medical care that will determine whether health care reforms succeed.

So when the new President convenes his working group, I’m hoping there’ll be a couple of doctors from Pennsylvania in the room. Specifically, doctors from Geiinger Health Systems. It’s not that they’ve found the magic wand that will miraculously clamp down on runaway health care cost inflation. There is no such thing. What they have done, however, is demonstrated that the appropriate use of technology and the creation of a culture of appropriate care can have significant impact on costs.

As reported by Fast Company magazine, the Geisinger Health System has introduced a program they call ProvenCare. The program is built around a relatively straightforward idea: medical providers should do the job right the first time. If they don’t, they pay to fix it. It’s a way of taking “pay for performance” concepts to an extreme. At Geisinger, they charge a flat fee for procedures like coronary-artery bypass surgery — including all the pre-and post-operative care involved — and they warranty their work. In the event of a preventable complication, Geisinger pays for the costs of making it right.

This shifts the cost incentives with the health system from providing as much care as the patient can survive to providing the right care. The underpinnings of the program centers around technology. For by-pass surgery, they created an online protocol of 40 steps their staff is expected to follow. Doctors receive a bonus based, in part, on meeting all those steps. However, each item on the checklist isn’t mandatory. Physicians are permitted to make exceptions, they merely have to note the reason for any deviations.

Initial results are promising and Geisinger is looking to expand the program — including the warranty — to other procedures. What’s happening in Pennsylvania is not just an interesting story, however. What’s significant, is how it demonstrates the compatibility of reducing┬ámedical costs while maintaining medical quality. If the next Administration’s health care reform plan is to work, that’s a story that needs to heard.