Better Health Care Through Innovation

by Kathryn Nix

Obamacare was sold, in part, on the promise that it would improve the quality of medical treatment and reduce costs through better care coordination and disease management. For the Medicare program in particular, this was to be accomplished primarily through the creation of Accountable Care Organizations (ACOs).

Small wonder, then, that earlier this month the administration trumpeted the fact that 154 ACOs were now “on board” to participate. That may sound like progress, but it’s not the whole story.

The government hasn’t actually come up with anything novel here. Many of the outfits now designated as “ACOs” have been working to achieve these goals for years, if not decades.

As is often the case, government is just now catching on to what the private sector has already begun to accomplish. The problem is, whenever government tries to replicate a successful private model, it almost always fails. That’s because bureaucratic operations simply cannot keep up with the speed of innovation. Ultimately, it becomes an outmoded relic that actually serves as a brake on further progress and delays the attainment of the goals it was meant to achieve.

This dynamic is evident in Medicare. The traditional, government-administered Medicare program is trying desperately to figure out how to bring down costs and offer better, more seamless care. Meanwhile, private plans, including those that participate in Medicare Advantage, have pursued numerous innovative approaches — and enrollees are reaping the benefits.

New collaborations among providers and insurers have been key. Take, for example, BlueCross BlueShield’s Patient-Centered Medical Home Initiative, which serves 4 million members, including Medicare Advantage patients, in 39 states. Early evidence indicates the program has reduced emergency-room visits and inpatient treatments without compromising the quality of care.

Aetna has taken a different tack, embedding nurse “case managers” in physician practices to coordinate care for 20,000 of its Medicare Advantage patients. In 2010, this produced a 12 percent reduction in costly acute-care days — on top of the overall 31 percent reduction across all the insurer’s care-management programs. 

Then there are Special Needs Plans (SNPs) specifically targeting the needs of the chronically ill. A study published in Health Affairs found that enrollees in one such Medicare Advantage plan had “shorter average lengths-of-stay in the hospital, lower readmission rates, slightly lower rates of hospital outpatient visits, and slightly higher rates of physician office visits than their fee-for-service counterparts.”

Meanwhile, new delivery models are also helping provide better quality at lower cost for all health-care consumers. “Hospital at Home” programs, such as the one offered by New Mexico’s Presbyterian Healthcare Services, use mobile nurses and physicians, as well as telemonitoring, to deliver hospital care to patients in their homes. It has produced as good or better outcomes for patients while saving 19 percent compared to costs for hospitalized patients. It’s also another example of a delivery innovation that is available to all privately insured patients, but not seniors enrolled in traditional Medicare.

Doctors Express, the first franchise urgent-care clinic, is addressing gaps in care options facing all patients. The clinics offer less expensive urgent care for those who do not require emergency-room treatment but cannot get in to see a primary-care doctor. One study shows that between 13.7 percent and 27.1 percent of emergency-room visits could be treated in an alternate setting, at a savings of as much as $4.4 billion annually.

One Medical Group, created in 2007, focuses on making primary care more patient-centered. In exchange for a nominal fee, all members enjoy same-day doctor appointments, online scheduling, and the ability to renew prescriptions or fine-tune treatment via e-mail — thereby avoiding unnecessary office visits. When office visits are necessary, patients spend less time waiting and more time with their doctor.

These are just a few examples of existing innovations. There are even more promising innovations on the horizon. Smart technology has paved the way for mobile apps to help patients manage their health, and tele-health enables caregivers to monitor and care for patients remotely. And advances in medical research will continue to revolutionize the practice of medicine.

But government doesn’t drive innovation in the health-care system — the private sector does. To keep the kind of successes outlined above coming, Washington must ditch the big-government approach to health-care reform represented by Obamacare. Congress should pass reform that encourages even more experimentation and innovation to benefit patients, rather than try to impose uniformity by copying yesterday’s successes and locking them in place under a government-run system.

— Kathryn Nix is a policy analyst in The Heritage Foundation’s Center for Health Policy Studies.

Critical Condition

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