In this era of increasing health care costs, risks, and changes, it’s becoming clearer that employers—rather than the government, insurance companies, or providers—hold the key to the much-needed transformation of our country’s health care system. When it comes to delivering health care services, large employers in particular have a vital role to play due to the scope of their purchasing power, as well as their expertise in supplier management and quality improvement.
In a recent article in the Harvard Business Review, health care innovation experts Robert S. Mecklenburg and Lindsay A. Martin discuss three key challenges facing health care policy makers and outline the important ways that large employers can help to overcome those obstacles and drive transformation. Read on for an overview of what the article had to say about how employers can respond to three important challenges.
Change is hard
Institutional change is never easy to implement, but one tactic that can help you to overcome this challenge is by encouraging cooperation across sectors in order to establish quality standards. At present, virtually every medical center, quality organization, and practitioner promotes a different version of “best practice,” which makes it difficult for employers and employees alike to understand what level of quality and value they are receiving from their insurance coverage and health care. But when best practices in care delivery are standardized, not only are unnecessary treatments reduced and safety levels improved, but both buyers and sellers of health care can use the same vocabulary and know that they are relying on the same information in determining what constitutes value and quality care.
How can this standardization be achieved? Cooperation—not competition—is key. While previous health care delivery models saw quality being treated as a matter of opinion and providers competing for business based on subjective reputations and market influence, the path forward lies in having both multiple providers and employers collaborate on creating a single definition of “quality,” as supported by medical evidence. Initiatives such as the Bree Collaborative, a multi-stakeholder health care collaborative in Washington State, have shown that creating a clear-cut definition of quality and a broad buy-in bring the production, purchase of, and payment for care into proper alignment. Through this approach, employers have the opportunity to objectively identify which providers are the most efficient and effective based on market-relevant quality indicators, and they can leverage their purchasing power to improve the quality of care that their employees receive.
Necessary change is often blocked by special interests
There may not be room for competition in creating a standardized definition of “quality,” but when it comes to purchasing health care services, competition among providers based on how well they meet the defined quality standards is what will keep performance levels high across the board and prevent special interests from interfering.
The greatest advantage of establishing consistent standards of quality of care is that it transforms care service lines into products that purchasers (or employers) can understand and evaluate on a comparative basis, just as is the case for any other business product that an employer would purchase from a supplier. Under this system, employers can now issue a request for proposal to health care providers for the delivery of a defined, evidence-based product. Providers in turn can submit proposals that detail how they deliver their services and how their operational models match up with quality standards for care. Once a provider has been selected by an employer based on an evaluation of the proposal, with perhaps a site visit for additional support, it is then the provider’s responsibility to keep the purchaser up to date with data on evidence-based patient outcomes, such as how quickly patients returned to their daily lives after their care experience and how patients themselves perceived the quality of their care.
Pragmatic solutions for creating and implementing change are not always readily available
Again, purchasing power and quality standards are the key factors that will help to overcome this challenge. There is no room for conflict in a market in which a number of providers have agreed on a single, quality-based purchasing standard. Providers understand that their options are either to promptly reach alignment among themselves or to simply have purchasers take their business to other suppliers. This is a strong motivating force for developing solutions that are practical and efficient, as opposed to those that are ideology-based, and it allows employers to exert considerable influence in reaching the agreed-upon standard even without a high level of clinical expertise.
Due to their purchasing power, large employers, businesses, and public sector entities alike can help to lead the charge in addressing the trillion wasted dollars currently burdening our health care system by collaborating with local health care providers to create a quality-based market and to define and execute services to transparent standards.