Why High Performance Health Care Remains Elusive

By Brian Klepper

Published 3/31/16 in Employee Benefits Advisor

Do you know about a high-value healthcare program that wildly exceeded your expectations by delivering provably better health outcomes at dramatically lower cost? If so, I want to know about it.

High performance healthcare services are available in virtually every costly healthcare clinical and financial niche: e.g., musculo-skeletal care, cardio-metabolic care, cancer, surgery, hospital bills, out-of-network claims, dialysis, large case management, imaging. Generally, these programs have deconstructed problems that consume large percentages of the healthcare dollar, and then developed solutions that are unconventional but more effective. They win, not by exploiting conventional healthcare’s perverse incentives as the mainstream does, but by exploiting market vacuums, like crazy pricing for mediocre health outcomes.

If benefit plan sponsors and unions go outside their health plans to favor these better services, their patients typically will fare better and they will achieve significant savings. But they’ll also disrupt the current excessive-care-and-cost-is-fine paradigm, and help bring things back to rights.

Advocates may gush about a particular program’s performance but, in my experience, high performance is rare. Few programs can provide hard data or credible testimonials showing that they solidly improve health outcomes or cost. Few can show that they can scale from performance at one location to another, or that their impact is enduring. Most telling, many vendors are unwilling to put part of their fees at financial risk against the bet that they’ll hit performance targets. More often, they want you to go at risk for their performance instead. So caveat emptor.

High performance healthcare is one answer to America’s healthcare cost and quality crisis. Are you in or do you know a high performance healthcare organization? Can you/they demonstrate it with data and testimonials? If so, let me know. As a working definition, we are searching for vendors that consistently achieve >20% improvement in either key health outcomes or cost. Thirty percent is better. The greater the impact, the more likely that purchasers will be willing to disrupt conventional processes.

Meaningful change won’t happen in healthcare until purchasers, including plan sponsors, work together to favor organizations that deliver better value and, equally important, start withholding favor from those that don’t.