Academic journal article Frontiers of Health Services Management

Managing Implementation: The Unanswered Question

Academic journal article Frontiers of Health Services Management

Managing Implementation: The Unanswered Question

Article excerpt

THIS ISSUE OF Frontiers of Health Services Management has two invited lead articles. The article by Glen Barton presents ideas on how high-quality, affordable healthcare can be achieved in the United States, discussing several key concepts that are being used at Caterpillar Inc. The article by Sister Mary Jean Ryan describes how a large, multistate healthcare organization has developed a "culture of quality" over a period of 13 years that led to the organization winning many quality awards at the state and national levels.


The four major concepts articulated by Barton are as follows:

1. Promoting consumerism is important.

2. High-quality healthcare costs less.

3. Health promotion is beneficial.

4. Employers need to participate in public policy debates in healthcare.

Promoting Consumerism Is Important

The key concept suggested by Barton is that if employees had to share a larger portion of the cost of their healthcare, they would become more active in controlling healthcare costs. In other words, they would become better shoppers. This idea has been put forward in many recent articles (e.g., Galvin and Milstein 2002) after the collapse of the managed care models of the 19903. This idea has intuitive appeal. As an organization implements a program based on this concept, one needs to consider the following three issues:

1. Cost shifting

2. Informed choice

3. Adverse impact of cost sharing

The first issue deals with shifting cost to employees. An organization needs to evaluate how much cost sharing will get the attention of employees to shop for value in healthcare. Is 30 percent cost sharing enough? How does cost sharing affect low-wage earners versus middle- or high-wage earners? It would be helpful to see empirical evidence showing that corporations with 30 percent healthcare cost sharing have lower rates of cost increases as compared to organizations with 10 percent cost sharing.

An additional problem is that hospital costs only account for 40 percent or less of healthcare costs. Medical prices have only gone up an average of 4 percent in the past few years, but insurance premium costs have increased 15 percent on an annual basis. The reason for this is major increases in drug prices and increases in physician office procedures (Coy 2003). Most companies have introduced threetier, cost-sharing drug policies to encourage use of generic drugs. I am familiar with confidential data for a large Fortune 500 corporation where introduction of three-tier drug pricing was saving money for the organization but did not change the overall total costs. The cost had merely been shifted to the employees. Buyers Health Care Group in Minnesota has implemented a consumer model recommended by Barton. he does not refer to the lessons learned from such a model nor to the success of this model in curtailing healthcare cost increases. Furthermore, he does not address why such a model has not been adopted in other markets.

The second issue is how to enable employees to make "informed choices." For employees to be able to be value shoppers, they have to have information on cost and quality of healthcare services. Some data on quality of healthcare services is now available for hospitals. However, there is no one accepted quality-rating system for hospitals. Three of the commonly cited quality-rating systems are those of U.S. News and World Report, AARP, and Solucient. Each of these rating systems is based on its own methodology. For example, a hospital can be ranked as a top heart care facility on one rating scale and not even be ranked on another scale (Sahney 2003). Physician ratings are almost nonexistent. Rating individual physicians on quality is a difficult technical problem because most physicians practice in a solo environment and only a small number of cases in a particular disease are treated by an individual physician. …

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