Column: The Role and Application of Best Practices

This series titled “Column: US Healthcare System” is sponsored content from our partners at Axene Health Partners.  AHP offers highly specialized health care actuarial and consulting services across a number of states.  We have curated this content because we think it adds value to the work our readers are engaged in.  As always, we welcome your feedback on this series.

This article provides a broad assessment of the role of Best Practices involving four key elements of successful healthcare outcomes:

  1. Cost of health care
  2. Clinical
  3. Patient education and care experience
  4. Health care provider education and experience

Such key elements are among the primary contributors to the improvement of population health (i.e.,
health outcomes for a population of people).

Throughout our country’s healthcare history neither single payer nor private payer fee-for-service models have demonstrated effective results to acceptably manage the high costs and inefficiencies of our fragmented health care system. Traditional Medicaid and Medicare single-payer models have tried and missed more than succeeded, as evidenced in part by (1) Medicaid’s transition to outsourcing insurance coverage to private payers in order to capitalize on their care management cost saving abilities, and (2) Medicare’s inability to keep annual growth to their target sustainable growth rate. Many private payers (insurers) also recognize the challenge but have not yet demonstrated clearly sustainable community-wide improvements in Best Practices based on continuing higher premiums overall.

Vertically integrated health care systems (i.e., hospital/physician integration) have demonstrated a degree of success. However, challenges remain because they are more broadly embedded in the national economics, clinical practices, and business practices of the health care industry, which underscores the broad range of issues needing to be addressed beyond any one payer model.

Unless a payer model is integrally designed and enabled to take on the challenge of creating aligned and effective incentives at both micro- and macro- levels for all health care stake holders regionally and nationally (private insurers, state and federal government, hospital systems, professional providers, drug companies, and patients), it appears unlikely to make large scale sustainable improvements in population health. This article does not propose a specific payer model solution, but rather focuses on the role that Best Practices can play in contributing to better healthcare outcomes regardless of what payer model is in place. For any payment models that exist in the future it is critically important that the models are sensitive to and enable the continuous improvement of Best Practices. To be successful, effective and sustainable payer models may also need enabling legislation to further the ongoing improvement of all aspects of Best Practices.

With the above comments as a backdrop, following are key outcome elements that when combined is integral to the concept of Best Practices:

Cost of Health Care – An overview of determinants

The costs to provide health care services and products by health care institutions and professionals can be defined in different ways:

  • The actual costs of a health care provider to deliver services and products
  • A provider’s commonly billed charges for services and products
  • The contractual price the health care provider has agreed to charge, either pursuant to a third party payer’s contract (insurer) or government program i.e., Medicare, Medicaid, etc.)
  • The sum of health insurance premiums plus patient cost sharing (copays, deductibles, and coinsurance %) required under an insurance policy or health plan
  • Additionally, related to health care costs are the Affordable Care Act’s individual income tax charged due to gaps an individual’s qualified health coverage, and the individual income tax credits for those with lower qualifying household income.

Continue reading the column here.