Hospitals and health insurers are commonly portrayed as adversaries in our nation’s healthcare system. Our patients and plan members are one and the same, yet their commonality is often overshadowed by competing priorities.
Hospitals must cover costs for technology, staffing and facilities, while also funding their mission to care for under- and uninsured patients. Health plans must keep a watchful eye on payments to hospitals and physicians, so they can drive down costs for their members and customers and remain competitive.
Many of the programs that could lower costs and improve patient outcomes—a key goal for both parties—require both hospitals and insurers to change behaviors, invest in new systems, and upend their reluctance to take on financial risk. Health plans, for example, may be asked to invest money and resources into efforts that may only begin to impact members’ health three or four years into the future, when many of those patients are no longer even covered by the plan. And hospitals may be required to jeopardize already thin margins by, for instance, experimenting with bundled-payment structures after decades of perfecting fee-for-service models.
But taking the long view can yield quick wins. In a new initiative we believe holds replicable approaches to cutting healthcare costs across the nation, our organizations, the University of Pennsylvania Health System and Independence Blue Cross, have united in our efforts around a key issue that propels healthcare spending year after year: hospital readmissions.
In just the first 12 months after implementing our new five-year contract—which stipulated that Independence Blue Cross would not pay Penn Medicine for unplanned readmissions of its members within 30 days—Penn has decreased the readmission of patients insured by Independence Blue Cross by 25%. It is the largest readmission reduction in the history of both organizations.
Our formula for success relies on aligning incentives and resources between our organizations and developing strategies that we see as crucial to building other cost-containment strategies.
The efforts started by mining the trove of data within Penn’s systemwide electronic health records platform and Independence’s data warehouse, which revealed that 40% of readmissions occurred within the first seven days after discharge. So we knew we had to focus on that crucial time period. We also identified patients at highest risk of readmission—those with cancer, heart disease, gastrointestinal conditions and sepsis, for instance. From there our teams developed a suite of programs and process improvements to streamline care, spanning settings from emergency departments and inpatient units to outpatient clinics and home-care settings.
Just as scientists bring structure and rigor to biomedical research, both insurers and clinical care teams must model that approach to measure what matters most—to make a true impact. Hospitals and insurers can use these approaches to make gains in other areas, from reduction of care disparities to improving outcomes from chronic diseases like heart disease and diabetes.
We must take full advantage of our industry’s unprecedented EHR technologies and data science to tackle costly problems in a focused way. We can also do more to standardize the way we care for patients, both those with similar conditions and those treated across many disciplines in even the nation’s largest healthcare systems.
We believe we have a model that can achieve cost savings while improving patient outcomes and transforming the relationship between payers and providers. We are working together rather than negotiating as adversaries. That’s the right prescription to ensure financially sustainable systems of care that keep our patients, members and communities healthy.