Managing Costs by Keeping Patients Healthy

HMOs–a bad word in health reform circles–flourished and then declined 20 years ago.  But were they entirely worthless?  Often they were bullies that took no patient or provider input into their decisions, and their cost control strategies could be brutal.  Their payment schemes to providers could cause unscrupulous doctors to skimp on care, but they did bend the cost curve for a few years.

Their best feature was that their payment schemes did address overutilization.  This had the potential to save lives and reduce morbidity.  Nothing good can come to a patient who is subjected to a test or procedure that he doesn’t really need, and a great deal of risk comes with every medical intervention.  I see countless instances of overutilization every day: repair of fractures that don’t really need it, shoulder and knee scopes for vague or non-existent indications, MRIs ordered for pain without any physical findings.  Our current reimbursement schemes reward all of this.

If we knew then what we know now regarding patient satisfaction, physician strategies to improve patient outcomes, the importance of good communication and physician empathy, would the HMO payment model have had more success?  Could we have kept patients satisfied, feeling well cared for, and been given good care while eliminating the financial incentives for dangerous overutilization?  What if HMOs had understood the precepts of patient centered medicine as we currently understand it.  Could primary care doctors have told their patients “no” without causing a backlash?

Now, I’m not suggesting that we return to HMOs, but alternative payment strategies that deliver just the care that patients really need can succeed so long as they are coupled with doctors practicing patient centered care.  Office visits, especially to primary care docs, will need to be better reimbursed to make this model attractive to general practitioners, but HMOs floundered primarily due to poor patient satisfaction rates, and we know enough now to manage costs better and keep our patients healthy and happy with their care.

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