Now Viewing: Health Care Cost and Value

Getting to the Essence of Value in Health Care

Aug 3, 2015, 1:57 PM, Posted by Susan Dentzer

In this era of value-based payment, we need to consider how different players within health care approach the value equation.

How would you judge the value of your health care? A longstanding definition of treatment holds that value is the health outcomes achieved for the dollars spent. Yet behind that seemingly simple formula lies much complexity.

Think about it: Calculating outcomes and costs for treating a short-term acute condition, such as a child’s strep throat, may be easy. But it’s far harder to pinpoint value in a long-term serious illness such as advanced cancer, in which both both the outcomes and costs of treating a given individual—let alone a population with a particular cancer—may be unknown for years. And then there’s the complicating issue of our individual preferences, since one person’s definition of a good outcome—say, another few years of life—may differ from another’s, who may be seeking a total cure.

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Three Key Lessons from the Health Care Transparency Summit

Apr 16, 2015, 1:36 PM, Posted by Anne Weiss, Susan Dentzer

A magnifying glass lies on top of money. (Image via taxrebate.org.uk)

“There is no single more powerful concept” in transforming health care than transparency—that is, accurate information for everybody about the costs, quality, and other aspects of health care—according to former US Senate Majority Leader and Robert Wood Johnson Foundation Board Member Bill Frist at the Second National Summit on Transparency in Health Care Costs, Prices, and Quality. Not only is shining the spotlight on costs and quality the key to making health care markets work, Frist said, but it’s also central to delivering the vaunted Triple Aim of better health, better health care, and lower costs. Here are our key takeaways reflecting how much transparency discussions have advanced since the first RWJF sponsored summit in 2013:

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Let's Keep the Payment Reform Momentum Going

Mar 31, 2015, 10:22 AM, Posted by Andrea Ducas

Recent advancements in payment reform have been massive and exciting. It's time to sustain the momentum and transform how we pay for and deliver care.

A hundred dollar bill. Modified image. Original photo by Ervins Strauhmanis.

When it comes to how health care providers are paid, change is in the air. I’m probably more excited than most people about trying to make sure our financial incentives are flowing the right way within the health care system. Here’s why.

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The Front Line of Medicine

Dec 18, 2014, 9:00 AM

For the 25th anniversary of the Robert Wood Johnson Foundation’s (RWJF) Summer Medical and Dental Education Program (SMDEP), the Human Capital Blog is publishing scholar profiles, some reprinted from the program’s website. SMDEP is a six-week academic enrichment program that has created a pathway for more than 22,000 participants, opening the doors to life-changing opportunities. Following is a profile of Juan Jose Ferreris, MD, a member of the Class of 1989.

It is easier to build strong children than to repair broken men.’

The words of abolitionist Frederick Douglass resonate for Juan Jose Ferreris, a pediatrician and assistant clinical adjunct professor at University of Texas Health Science Center. He sees a straight line between the public funds allocated for children’s care and their well-being as adults.

“Kids receive less than 20 cents of every health care dollar. Meanwhile, 80 percent goes to adult end-of-life care. Why aren’t we spending those funds on people when they’re young, when it could make a genuine difference?”

Ferreris contends that money also shapes health in less obvious ways. Salaries of primary care physicians are well below those of more “glamorous” specialists. Some fledgling MDs, burdened with medical school debt, reason that they can’t afford not to specialize. Consequently, he says, only 3 percent of medical students choose primary care.

For Ferreris, who is both humbled and inspired by his young patients, building a Culture of Health necessitates recalibrating priorities.

“Nobody’s concentrating on the whole; they’re only looking at one part. And they’re not paying attention to the human—the brain, the spirit, the soul.

“We overlook that aspect...but it’s where I believe the primary care doctor has irreplaceable value.”

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How Cataract Surgery Helped Me See the Future of Health Transparency

Dec 12, 2014, 1:34 PM, Posted by Risa Lavizzo-Mourey

Doctors in a surgery room.

More and more health care costs are shifted to consumers. So why, asks RWJF President and CEO Risa Lavizzo-Mourey, can’t we easily discover and compare health care costs and quality?

Here’s how the subject came up. Recently, Lavizzo-Mourey underwent cataract surgery at an outpatient center in Philadelphia. No matter whom she talked to—and she was shunted from one person to the next—she could not learn the all-in cost of the procedure.

Lavizzo-Mourey finally did manage to find out the cost of her surgery: $2,000, including co-pays and deductible. But the whole episode, she says, is illustrative of a larger problem.

Writing in a recent blog post on the professional social networking site LinkedIn, Lavizzo-Mourey asks: “Could there be a clearer example of the lack of transparency in the U.S. health care system?”

To get the information we need, the Robert Wood Johnson Foundation is funding a set of studies to help us better understand how greater price transparency influences consumer and provider decisions. “And in March,” Lavizzo-Mourey adds, “we will host a summit on transparency that will attempt to come up with more answers."

Along those lines, RWJF last year issued a challenge to developers to devise consumer-friendly tools to parse the abundant hospital price data released by Medicare. The winner? Consumer Reports, for the Consumer Reports Hospital Adviser: Hip & Knee, a personalized app for health care consumers seeking the best hospital for hip or knee replacement surgery.

You can help us move the cost and quality needle forward. Do you know of any other price/quality apps or tools? Let us know.

Transparency in Health Care? Sadly, That's Not How We Roll.

Nov 7, 2014, 3:13 PM, Posted by Andrea Ducas

Patrick Toussaint fixes a flat tire. Andrea’s husband, Patrick Toussaint, using his super strength to tighten a lug nut.

What do changing a flat tire and scheduling a surgical procedure have in common? Nothing. And that’s the problem.

Last month, on our way home to New Jersey from Boston, my husband and I got a flat tire. And while this is a dreaded possibility on any road trip, it happened to us at 9 p.m. on a Sunday. No shops were open, and with an early morning flight just a few hours away we didn’t have time to wait for AAA.

At this point it’s important to emphasize that neither my husband nor I know a thing about cars. We didn’t even know we had a jack or spare in the trunk until we called my uncle, who teased us (“You have a new car! Everything you need is in the back!”) and gave us the pep talk we needed. So we pulled out our owner’s manual.

I’m not sure who that manual is written for, but it clearly isn’t for us. After five minutes of thinking I’d need to call the airline and book a later flight, I realized: There is a better way. I pulled out my iPhone, Googled “how to change a flat tire,” and called up a YouTube video and a step-by-step, picture-guided Wikihow article. Within 20 minutes, the tire was changed, our spare was filled with air to 60 psi, and we were on our way.

So what does any of this have to do with health care? Unfortunately, not very much.

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Helping Physicians Do What They Got Into Medicine to Do

Sep 25, 2014, 10:02 AM, Posted by Anne Weiss

Two women are at a desk, one is counting money

“Health care was never intended to be the behemoth it's become. It was intended to be the place where people could get help for medical problems so they can return to living a healthy life.”

For me, this statement—from an internist I met last month—is a refreshing take on the value of the health care system in a Culture of Health. It’s an inspiring vision for those of us focused on the usual litany of problems: Our health care system costs too much, and delivers outcomes that lag behind other countries to such a degree that it threatens our economic health and social fabric.

Last year, the Robert Wood Johnson Foundation (RWJF) invested in five markets—Maine, Minnesota, Oregon, Colorado, and the St. Louis region—where there is the will and ability to measure health care costs and quality, and use that information to drive change. In each of these markets, we’re working with multi-stakeholder organizations who are members of the Network for Regional Health Improvement (NHRI). Each organization will produce reports that compare the cost of treating patients in each primary care practice in their market. (You can learn more about this project here.)

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Exactly How Much DOES That Appendectomy Cost?

Aug 1, 2014, 4:29 PM, Posted by Andrea Ducas

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Want to know one of health care’s dirty little secrets? While we know how much the country spends on care each year, we have little understanding of what it actually costs to provide care.

Think, for example, about an appendectomy. What does it really “cost” the health care system to perform that procedure? The answer is complex, and of course it includes everyone’s time—from the surgeon to housekeeping staff—and it also includes the drugs, equipment, space, and overhead associated with your stay.

The cost of your visit will also depend on who is delivering your care. A consult with a registered nurse (RN) is less costly to the hospital than one with a physician.

Then, consider insurance. If the price your carrier pays for that RN consult is $85, but the price another carrier pays is only $65, what does it actually cost the hospital—and how do those variances affect what you pay both out-of-pocket and for insurance premiums? Moreover, health care providers are currently not trained to think about the costs of the care they provide—and often have no incentive or means to even consider those costs.

These complexities have made it difficult to reform the way we purchase and pay for health care.

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What’s Keeping the Cardiac Polypill off the Market?

Jul 3, 2014, 10:05 AM, Posted by Sheree Crute

Headshot of Lisa Ranson Lisa Ranson

No matter how busy Lisa Ranson’s morning gets, somewhere between preparing breakfast and suiting up for work or play, she takes the first cluster of eight pills that protect her from a family legacy of heart disease so powerful she had bypass surgery at 34.

Even at that young age, she was no stranger to daily prescription regimens. Growing up, she watched her dad struggle. These days they compare notes. “He’s survived two heart attacks, had bypass surgery, and he has a pacemaker,” Ranson says.

An avid walker who treks three and a half miles most days near her home in the small town of Dunbar, W.Va., Ranson is now 51 and in great shape. But her healthy lifestyle is no match for her genetic inheritance—she is one of 34 million people living with hypercholesterolemia.

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RWJF Clinical Scholars Video Podcast: Joshua Sharfstein on Hospital Incentives

Jun 19, 2014, 2:00 PM

One of the challenges of health care reform is to realign financial incentives so that providers and hospitals have economic inducements to keep patients healthy, rather than just treating them when they’re ill.

In the latest Robert Wood Johnson Foundation (RWJF) Clinical Scholars Health Policy Podcast, Maryland Secretary of Health & Mental Hygiene Joshua Sharfstein, MD, discusses a hospital in Hagerstown, Md., that took charge of the local public school health program, hiring school nurses and more “because it’d be an economic winner for them.” The hospital’s economic incentives were such that, “If they did it well, and helped kids with asthma control their asthma so they didn’t need to go to the emergency room, [the hospital] would save money on ER visits,” Sharfstein explains.

Sharfstein is interviewed by Clinical Scholar Loren Robinson, MD. The video podcast is part of a series of RWJF Clinical Scholars Health Policy Podcasts, co-produced with Penn’s Leonard Davis Institute of Health Economics.

The video is republished with permission from the Leonard Davis Institute.

This commentary originally appeared on the RWJF Human Capital Blog. The views and opinions expressed here are those of the authors.