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Colorado Providers - Importers or Exporters of Services?

A potentially game-changing innovation for improving quality and controlling costs arrives on the health care scene next month. Unfortunately, though, Colorado health care facilities are not part of it…yet.

Beginning in 2014, large national employers including Wal-Mart and Lowes, will begin offering their employees the opportunity to travel to national Centers of Excellence (CoE’s) for total hip and total knee replacements. If the employee travels to the CoE for care, they will have no out of pocket costs for any of their treatment and all travel and meal expenses, for the employees and a “helper/companion”, will be paid for by the employer. There are no Colorado providers on this CoE list and, as a result, Colorado will begin exporting some of its most profitable medical procedures beyond its borders beginning next month.

The CoE program began as national employers grew frustrated with the large variance in quality and cost they saw around the country for select high priced procedures. The goal was to partner with facilities who consistently demonstrate high quality outcomes combined with a reasonable and bundled price for all services. Care process redesign, detailed quality improvement processes, patient centric care models and a thorough vetting process that includes a shared decision making tool are all elements of the CoE program. This press release focuses on total joint replacements but CoE programs are also operational for heart surgery, spine surgery and organ transplant services.

What does this mean for Colorado providers? It means they need to begin to provide transparent cost and quality information to purchasers, be they employers or patients. Colorado providers have not been able to “bundle” their pricing for total joint services which is a requirement for participation in the national center of excellence program. Until Colorado providers can demonstrate transparent quality and cost information, they will not be able to grab the attention of these employers and the organizations that are working with them to create CoE’s. If Colorado providers are to remain competitive as the market transitions from a local or regional model to a national model, they will have to demonstrate their value compared to providers in Seattle, Cleveland, Baltimore and other homes to major national providers.

Providers looking to remain competitive in this changing health care environment should first understanding where their practice or practice group is positioned with respect to quality and cost. CIVHC is working to develop episode/bundle pricing reports from the Colorado All Payer Claims Database to assist providers in identifying key cost and quality metrics required to develop a bundled services program. Even with the best data and analytics, CoE development must have a provider committed to developing the program and a payer committed to designing payment models and benefits to encourage patient participation in bundles. The great news is that Colorado providers are reaching out to organizations like Health Designs Plus who have assisted in developing the partnership between national self-funded employers and CoE’s. Locally, it would be extremely helpful if self-funded employers engaged the provider community to demand transparent and bundled pricing with demonstrated excellence outcomes.

It will be exciting to see how the Colorado provider community evolves in response to the national center of excellence model that is developing. Colorado has a wealth of outstanding provider groups who have the ability to compete on quality and cost with any organization in the country. In the defense of providers, there hasn’t been a distinct incentive for them to develop a total joint bundled product. With patients leaving the state for one of the most profitable surgical procedures, Colorado providers should begin to take notice and embrace the opportunity to develop total joint centers of excellence. By doing so, Colorado patients will benefit with local access to higher quality procedures with transparent pricing. Colorado purchasers of health care will benefit in having quality and cost transparency information, and Colorado providers will establish themselves as importers of total joint patients rather than the exporter we will be as of January 2014.

About the Author: Bob Kershner is CIVHC's Director of Health System Payment Strategies. Contact him at bkershner@civhc.org.
 

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