Inefficiencies in healthcare costs

Kevin Aron, managing director of Medscheme South Africa. (Supplied)

Kevin Aron, managing director of Medscheme South Africa. (Supplied)

Kevin Aron, managing director of Medscheme South Africa, explains that the current healthcare delivery system in South Africa does take not take a single view of the patient and this leads to fragmentation. “Individual healthcare providers are responsible and remunerated for only one aspect of a patient’s health and, as such, they do not have a holistic view of the patient’s healthcare condition.

“This means they lack the ability to take all the appropriate medical actions, which in turn can lead to less than optimal healthcare decisions.

“Patients with complex health conditions must visit a series of healthcare providers, each of which acts independently of the others, resulting in fragmented healthcare."

Aron says that this adversely impacts healthcare quality, increases healthcare costs and often results in poor outcomes.

Fragmentation of care therefore results in the inefficient allocation of healthcare resources and unsustainable spending. The solution lies in creating an environment that systematically organises patient care through information sharing among all parties concerned to achieve safer and more effective care. This means that the patient’s overall health status is known by all healthcare providers involved in the care, and this information is used to provide safe, appropriate and effective care to the patient.

“Managed care providers are well placed to play a role in creating such an environment, where the care provided to a patient is co-ordinated to achieve best outcomes at best cost. Health intelligence tools, such as provider profiling, can play a role in the facilitation of co-ordination of care by monitoring and understanding the behaviour of healthcare ­providers from a perspective of cost and quality of care delivered, and sharing this information back to the providers involved in the care,” he says.

GP care

Medscheme’s philosophy has always been that the general practitioner (GP) is best placed to act as the co-ordinator of care. “GP profiling has at its foundation the philosophy that the GP is the co-ordinator of care for a patient,” says Aron.

“The ideal healthcare delivery model is therefore based on the premise that each patient has a nominated GP and the profiling tools includes logic to determine that relationship.”

Initial profiling efforts focused mainly on cost-effectiveness, but such a singular focus could lead to under-servicing and poorer long-term outcomes. However, quality measures have been introduced to balance the assessment and ensure that cost is not minimised at the expense of quality of care, which look at both process and healthcare outcomes.

Process measures do not directly measure outcomes, but rather the extent of the use of processes that are widely accepted to improve outcomes, such as annual HbA1C testing of diabetic patients. Medscheme measures GP performance against a benchmark derived using the Achievable Benchmarks of Care (ABC) methodology, where the benchmark is based on the process of care practices already being achieved by best-in-class providers. Aron points out that since process measures are already based on the clinically appropriate population, no risk adjustment is necessary. “Benchmarks for outcomes measures are, however, risk adjusted and are based on expected values derived from regression analysis.”

It is important in the context of both cost and quality measurement, to ensure that the results are reliable. “To this end certain volume thresholds, in terms of number of patients, are set to ensure the results are meaningful and not subject to significant random variation,” he says.

Profiling delivers information critical to a number of initiatives, including pay-for-performance reimbursement mechanisms, contracting networks, administrative efficiency, provider feedback and consumer advice. The function of pay-for-performance reimbursement is to align the financial incentives of providers with high-quality and cost-effective care. It may also be used to drive other desirable behaviour. Through the use of profiling tools, top performing healthcare professionals can be rewarded.

A peer management process is used to assist those GPs who perform significantly worse than their peers. This is not a punitive process, but designed to assist GPs to understand and improve their profile where indicated.

Traditional managed care interventions cover all providers, but adopting an exception management approach, focusing on only those providers that require intervention identified through profiling, an administrator is able to achieve operational efficiencies and the administrative burden on providers is lessened.

Closing the feedback loop is an important part of the profiling ­process, giving providers information to improve their practising behaviour.

“Medscheme’s GP profiling tool has an extensive web interface ­providing significant detail on actual and benchmark measures. In addition, a peer review mechanism allows poor performance to be addressed at a peer-to-peer level,” Aron says.

Benefits of profiling

Currently patients receive very limited­ information on the quality and cost of the healthcare services they receive. Profiling information could be used to some effect in this context, although to date this application has been limited in the South African market. Medscheme’s on­going, broad review of the impact of its pay-for-performance initiative with GPs has revealed improvements in most of the identified ­quality measures since this initiative was implemented in 2007.

A more specific review of the impact, on a largely closed population of doctors and members, has shown positive outcomes for both cost and quality measures. In this case pay-for-performance was ­supplemented by targeted, face-to-face workshops with the healthcare professionals.

At a more granular level, profiling has clear benefits in terms of identifying undesirable practices in ­addition to driving general improvements in cost and quality.

Similarly, significant gains are to be made through the detection of fraud. “While current models are not perfect, they are subject to continuous improvement and play an important role in co-ordinating care and managing the cost and quality of healthcare delivered to ­members,” he concludes.

This article has been made possible the Mail & Guardian's advertisers. Content has been signed off by Medscheme.