Highly productive health care organizations

With Dr. Arnold Milstein (whose work is described below) and Jordan Rau, I’ll be a participant on a webinar on this subject tomorrow (March 19) at 1pm Eastern. Details here.

In “American Medical Home Runs” (Health Affairs, 2009), Arnold Milstein and Elizabeth Gilbertson examined four physician practices or groups that had relatively low risk-adjusted per person costs and above average quality scores. What makes them tick?

A common thread is an intense focus on care for patients with chronic conditions. This is important, if unsurprising. The top of the health spending distribution is dominated by patients with chronic conditions and functional limitations. Naturally, then, that’s where an organization will find the easiest efficiency gains.

The authors discuss what the four organizations do to provide better care to such patients. I’ll let you read the details for yourself (the paper is ungated, I believe), but a unifying factor is an intense focus on preventing acute events, like ED visits and hospitalizations, among patients with chronic conditions. In general, more preventive and maintenance care wouldn’t save money. But when focused on the sickest patients, studies show it can. (Here’s one study. I’ll review it and other work in a subsequent post.)

The organizations also achieved efficiency gains in other ways, by standardizing care so that they could use lower cost clinicians where many systems use higher cost ones.

Improved efficiency was facilitated at all four sites by an exclusive or predominant focus on chronic care for older patients.
This focus increased the commonality of patients’ needs, thereby allowing greater standardization of care processes. Standardization, in turn, enabled the practices to replace physicians with nurse practitioners (NPs), NPs with registered nurses (RNs), RNs with licensed vocational nurses (LVNs), LVNs with medical assistants (MAs), and/or MAs with unlicensed staff.

Careful selection of and nature of contracting with specialists also played a role.

[E]ach of the four primary care medical home runs used prior referral experience, community reputation, and any available payer comparisons of specialists’ performance to concentrate specialist referrals with one well-performing specialist or specialist group per specialty. In two of the offices, conservative resource use by these specialists was reinforced by capitation payment by managed care payers.

Three of the four organizations offered their own insurance product. This is where I would start to worry a bit. There’s very little work on the cost and quality outcomes from such vertical integration and behavior, but it generally points to higher prices and doesn’t always suggest better quality. When quality is higher, is it enough higher to justify any price increase?

It should be said, that a study of this type can’t produce strong evidence of causation. Randomness would always produce some organizations that are lower cost and higher quality than others. What strengthens the case is if those organizations have common features, as the authors showed.

What Milstein and Gilbertson found makes a lot of sense. Follow the money. Sicker patients (those with chronic conditions) is where you’ll end up. It is possible to provide better care for lower costs for those patients. The big question is whether features of organizations that do so are replicable. The authors suggest that at least some are. However, the track record for spreading productivity in health care is not good.

UPDATE: I had incorrectly inferred from the article that the organizations that offered insurance refused to take patients covered by other plans.


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