Cutting Health Costs: Evidence Not Policy

Take nothing on its looks; take everything on evidence. There’s no better rule.

Charles Dickens (1812-1870), Great Expectations

A school of thought exists that says: follow health care policies and lower costs will ensue. That is the school of great expectations. This has been the Obama administration’s approach, and it doesn’t work.

There is another school that says: Go to the market, get the hard-ass evidence on outcomes, and examine details in the bills, those who pay the bills will decide what services to use and what to pay.

The latter often requires direct examination of the bills. And it is being increasingly being used by employers to set their own criteria for what they will pay, and it often involves direct contracting between the employer and hospitals and physicians with middle men experts to sort out what is relevant to outcomes.

The direct approach requires a different mindset. It often involves bypassing 3rd parties such as government and insurers and going directly to the details in the payment request from hospitals and doctors. Employers are now looking for management companies that will cut the cost of health care by scouring hospitals and physician bills and asking these hard analytical questions.

One, what do you do that is structurally different, that cuts waste and bypasses policy issues?

Two, show me hard evidence of longitudinal results, that what you’re doing works and cuts my costs and gives equal or better results.

Three, show me clinical and client testimonials that you do what you say you do.

Four, give me data that proves that what you are doing is scalable, that it can be applied across the board for a variety of procedures and types of care.

Five, how long have you been in business, and how likely are you likely to stay in business, given the trajectory of your performance for your clients?

Six, are you willing to go at financial risk to prove you can do what you say you can do?

What you want as an employer seeking these companies is Facts, nothing but Facts. Facts alone are what needed, nothing else. Root out everything else.

A coalition of direct care forces – concierge physicians, ambulatory care surgery centers, employers, and management companies fostering direct care – are coming together to cut costs without sacrificing quality.

At this stage of the health system evolution, it will require management and billing experts to sort through bills and contracts to find what is essential for care and what is not and what constitutes a reasonable and rational charge for services.