Higher Quality Does Mean Lower Cost at Geisinger

In the managed care industry, it’s not uncommon to think of providers as resistant to change, protective of their historic turf, and unappreciative of the real contributions that health plans, PBMs, and DM companies make toward patient care. These perceptions are often correct, though not all the time and not everywhere. After all, it’s not a black-and-white world. Context counts.

Managing Editor Frank Diamond’s cover story on the Geisinger Health System’s ProvenCare program of standing behind its coronary artery bypass graft surgeries certainly needs to be read in context, and Frank makes the context clear. Geisinger is an integrated system, with both insurance and provider arms. These arms have embraced a program in which, to oversimplify, the hospital guarantees a price for the surgery and — the new thing — coverage of post-operative complications for 90 days at a total cost that, as we understand it, is well below historical charges.

It seems to work for both sides, and if it does, there is no reason, in principle, that it cannot work with hospitals and plans that are unrelated. For our clinical readers, the payoff is in outcomes: The only way the hospital can make out under such a deal is to reduce post-operative complications, and it is doing just that, by improving systems of care.

This isn’t exactly classic pay for performance, but the goals are the same: reasonable cost and improved quality. We’ll be seeing more such experiments in the coming years, partly because of Medicare’s decision not to pay for some costly and preventable “never events.”

Also on the P4P front, Tom Kaye, senior pharmacy director at Passport Health Plan in Kentucky, lists reasons for insurers and PBMs to attempt to negotiate performance standards and incentives with retail pharmacies, which right now are not working very closely with other parts of the system (even though they’d be thrilled to see all scripts arrive electronically).