Healthcare Value 

James H. Landman

Should patients be accountable for value? Their willingness to seek out appropriate services, maintain a healthy lifestyle, and adhere to prescribed treatments will certainly affect the quality of care outcomes and should reduce total long-term costs of care.

As providers are asked to assume more risk for care outcomes and costs, they are naturally questioning the role of patient accountability. HFMA asked attendees at its October 2011 Thought Leadership Retreat which of the following strategies would most effectively increase patient accountability:

  • Develop systems to help patients improve their health and maintain wellness
  • Penalize patients who do not accept accountability for care
  • Expose all patients to greater financial risk for their care

The responses were divided: 34 percent chose "develop systems," 27 percent chose "penalize patients," and 39 percent selected "expose all patients to greater financial risk." Is there a correct answer?

Penalty-and-Reward Programs

Penalty-and-reward programs to encourage individuals' accountability for their health are gaining traction, especially within the context of employer-sponsored insurance.

How widespread is the concept? In a recent employer survey, 25 percent of respondents already penalize or reward individuals based on smoker/tobacco-use status, another 11 percent plan to do so in 2012, and 29 percent more are considering doing so in 2013 or 2014 (Towers Watson, Health Care Changes Ahead: Survey Report, October 2011). Interest is growing in penalties and rewards based on "biometric outcomes" such as weight or cholesterol levels. Although only 8 percent of respondents use biometric-based programs today, another 9 percent plan to do so next year, and 48 percent are considering it for 2013 or 2014.

There are limits on penalty-and-reward programs' ability to control costs. Privacy laws limit employers' ability to tie health factors to specific individuals. Federal guidelines strongly prefer programs that reward voluntary participation in health-promotion programs regardless of outcomes over programs that reward attainment of specific outcomes. The latter face more stringent standards, in part because certain health factors can lie outside of an individual's control. Penalty-and-reward programs also implicate potentially controversial values. It's easy to target smokers, but should they be penalized more than participants in high-risk sports?

Finally, penalty-and-reward programs are largely limited to full-time members of the workforce, leaving a significant percentage of low-income and unemployed individuals outside their reach. Some states have experimented with penalty-and-reward systems within their Medicaid programs, but outcomes have been inconclusive.a  

Increased Individual Financial Risk

Cost-sharing is based on the premise that individuals with "skin in the game" will reduce utilization of unnecessary healthcare services and become more value-sensitive, seeking out providers that offer high-quality care at lower prices.

In recent years, consumers have gradually assumed a greater share of healthcare costs. A 2011 employer health benefits survey by the Kaiser Family Foundation and Health Research & Educational Trust disclosed that while family coverage premiums grew by 113 percent from 2001 to 2011, worker contributions increased by 131 percent. The number of covered workers in a plan with a deductible of at least $1,000 for single coverage grew from 10 percent in 2006 to 31 percent in 2011.

A well-designed cost-sharing plan can reduce utilization of unnecessary services. A recent study of Mayo Clinic employees, for example, found significant, sustained decreases in utilization of diagnostic testing and outpatient procedures over a four-year period following introduction of a $25 copayment for specialty care visits and 10 to 20 percent coinsurance for imaging, testing, and outpatient procedures. At the same time, the plan removed cost-sharing for primary care provider visits and preventive services.

Less certain is cost-sharing's potential to make consumers more value-sensitive, given the current state of quality and price information. Outcome-of-care measures on Medicare's Hospital Compare website, for example, are currently limited to death and readmission rates, neither of which provides consumers with information on functional outcomes for specific procedures. Price information is even more difficult to come by. A recent report by the GAO concluded that the "lack of health care price transparency presents a serious challenge for consumers who are increasingly being asked to pay a greater share of their health care costs" (Health Care Price Transparency: Meaningful Price Information Is Difficult for Consumers to Obtain Prior to Receiving Care, September 2011).

Cost-sharing has limited potential for low-income and very sick individuals. In these instances, cost-sharing may simply delay needed care or create financially devastating hospital bills.

Patient Engagement Systems

Patient medical homes, care navigators, and case managers are examples of systems providers have developed to increase patient engagement, coordinate patient care, monitor patient adherence, and manage utilization. They have shown signs of success, especially when directed at intense users of health care-particularly patients with multiple chronic-disease-related conditions who account for a disproportionate share of healthcare costs.

Some of the most effective examples of patient engagement systems have involved providers with an associated health plan (e.g., Geisinger's ProvenHealth NavigatorSM model) or with a self-funded employee health plan (e.g., Adventist HealthCare's patient-centered medical home pilot or AtlantiCare's special care centers).b Indeed, payer and provider collaboration is key to success. Providers need access to claims data to track utilization trends, and payers and providers need to define equitable division of savings generated by patient engagement efforts. Patient engagement systems can also require significant up-front provider investments in human capital and technology, as well as alignment among primary care, specialty care, and acute care providers.

Small Parts of a Bigger Solution

So what is the correct answer to the patient accountability question? All of the above. No one solution will work for all groups of patients.

Limited patient accountability today is symptomatic of bigger issues within the healthcare system, including misaligned incentives, incomplete information, and fragmented care. All stakeholders-providers, employers, payers, and patients alike-will have to work together to better align incentives, reduce barriers to quality and price transparency, and identify equitable means of sharing both the costs and savings of improved patient accountability.

James H. Landman, JD, PhD, is director, thought leadership initiatives, HFMA, Westchester, Ill. (


a. See, for example, the assessment of West Virginia's Mountain Health Choices plan in The West Virginia University Institute for Health Policy Research et al., Evaluation of Mountain Health Choices: Implementation, Challenges, and Recommendations, Robert Wood Johnson Foundation, Aug. 25, 2009.

b. Steele, G.D., et al., "How Geisinger's Advanced Medical Home Model Argues the Case for Rapid-Cycle Innovation," Health Affairs, November 2010; Lee, J.G., et al., "Starting a Medical Home: Better Health at Lower Cost," hfm, June 2011; and Gawande, A.,"The Hot Spotters," The New Yorker, Jan. 24, 2011.

Publication Date: Monday, January 02, 2012

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