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For many Colorado employers, employee health insurance is among the largest expense line items, often second only to salaries and benefits. Many manufacturers may pay more for healthcare than for their raw materials. Yet the healthcare market fails to deliver-to-deliver consistent value. Here’ why:
These are not, however, symptoms of a “broken” system. As Don Berwick reminded us, “Every system is perfectly designed for exactly the results it is getting.” In other words, inefficiency, ineffectiveness, and rapidly rising costs are all the inevitable outcomes of a dysfunctional healthcare market place. These characteristics result from how care is being bought and sold in every market in every state.
A quick review of the literature via google reminds us that effective, efficient markets have, among others, the following critical characteristics:
As a recent Commonwealth Fund article, “Making Health Care Markets Work Better: The Role of Regulation,” points out, not a single one of these conditions is met in today’s healthcare market. And while we agree that Federal and state regulators can have some effect to ensure that some of these conditions are at least partially met, we continue to believe that employers are the key to creating a functional healthcare market place. While employers cannot do much about the consolidation in healthcare that leaves Colorado with only a small number of health plans and providers, employers – numbering literally in the thousands – can and must (if they want better value) act as purchasers to create a competitive marketplace. As the Commonwealth Fund article puts it…
“Historically, increased consolidation among providers has been associated with higher prices and lower quality. But the current emphasis on moving from paying for the volume of services to paying for the value they produce may change that dynamic.”
Exactly. And employers hold the key for changing that dynamic, They have the numbers. They pay the bills – either directly or through their premiums. By acting as purchasers, not simply payers, they can prod the market into improving value. And they can do so by using the best-in-class tools offered by CBGH that address the two parts of the value equation – quality and cost. These tools include:
Most of these are tools actually designed by employers for employers. All of them have been adopted by CBGH as providing employers with the best tool kit possible for demanding improvements in the efficiency, effectiveness, and affordability of care.
If you want to know more about these tools and how they can fit into your efforts to rein in rising healthcare cost while improving the care your employees receive, give us a call. Together we can change the marketplace.