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New plan kicks off to help consumers pick a health system during open enrollment

If consumer choice can be leveraged correctly, it forces physicians, hospitals and health systems to maintain a consistent level of care.

Jeff Lagasse, Associate Editor

Choice in healthcare is more important now than ever. With a culture of consumerism permeating the industry, it's increasingly common for patient to select a provider based on quality -- meaning those on the delivery end of care are now being held accountable.

That's a good thing for providers, because if consumer choice can be leveraged correctly, it forces physicians, hospitals and health systems to maintain a consistent level of care, and it also has the potential to cut down on costs.

One of the key strategies that Simeon Schindelman has discovered is that choice can be made more meaningful when consumers pick health systems during an open enrollment period. The CEO of Brighton Health Plan Solutions has developed such a strategy in the midwest, and now, via the Create program, the philosophy is being tested in the tri-state area of New York, New Jersey and Connecticut.

The premise is that consumers often have difficulty making choices, for a number of reasons. One is that sometimes, when a person undergoes medical care, they do so in an emergency situation -- they're on a gurney, or in the emergency room. It's not a time when patients feel they have a great amount of options in terms of their decision-making.

Secondly, physicians have a tremendous amount of influence over what people do. It's difficult for a consumer to make a decision in contradiction of what their physician recommends, whether it be a type of service or where that service is performed.

The importance of choice is highlighted by a very wide range of cost variability among providers. Assuming quality outcomes are equivalent, there's a tremendous amount of money to be saved by going to the right provider at the right location.

"Consumers reward those who provide services in the most efficient and effective manner," said Schindelman. "If we can help consumers make the right choices, we'll be helping the people who provide efficient and effective help. And we won't be rewarding those who don't."

Facilitating choice, and directing people to the most effective providers, is a philosophy that wouldn't have worked on a practical level even a few short years ago. Today, though, with the advent of integrated delivery systems, price and quality information -- as difficult as it can sometimes be to interpret -- and electronic health records, choice has taken in a role of supreme importance.

"When consumers make informed choices, they will build an environment of competition in the healthcare marketplace," he said. "Competition in healthcare is just like any other business in America -- it's going to drive costs down and quality up."

By having consumers make those choices at open enrollment, and not whenever they have a health need, the incentives for consumers, providers and employers and more aligned, said Schindelman. And when different entities in a transaction have aligned interests, they perform better and have better results.

"When a family is integrated into a healthcare system, they now get all or most of their healthcare services from that system," he said. "That healthcare system is now changing in several incredibly important ways. One, it will now see the vast majority of that family's use. They'll have the data and information about that family they never had before. It reduces care fragmentation, and when it does that, the electronic health record is deeper and richer, and it has better data to promote the right services at the right time for that family."

While Create has shown promise in the northeast, the similar midwestern program has several years' worth of performance that confirms is creates an environment of supply side competition in healthcare. Moving business to the best-performing systems results in best-in-class pricing from healthcare partners. Schindelman even said their payroll deductions go down as a result.

For the lesser-performing providers, it creates a clear financial incentive to improve.

"You're motivated to improve cost and quality if you're not getting the enrollment you think you want or deserve," said Schindelman. "When some healthcare systems don't get the enrollment they want, they're losing, and they push to improve. And it's good for everybody. Those who perform the best will improve the most. Again, it's about aligning interests."

Schindelman sees market share being shifted in the tri-state area, resulting in providers offering aggressive pricing in order to win the loyalty of families. Eventually, he wants to expand the approach to encompass more than just a handful of geographic enclaves.

"We will be moving to digital marketplaces so they can benefit from this kind of model," he said.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com

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