Purchasers Can't Wait

February 1, 2006

Early assessments of the growing consumer-directed healthcare trend point to the model's potential, but with cautious optimism. Mary O. McWilliams, president of Regence BlueShield in Seattle, believes a little less caution and a lot more action on the part of health plans will give consumer-directed healthcare (CDHC) just the kick it needs.

McWilliams' experiences have taught her that consumers are ready to make wise healthcare choices and can't wait much longer for the industry to supply cost and value information to meet their demand. The time for action is now, and some data is better than no data at all, she says.

"We need to be a catalyst for change, and a lot of that centers on the role of the consumer," she says. "We are committed to the CDHC philosophy that engages the consumer in making decisions about the cost and quality of care." Regence BlueShield is a not-for-profit plan with 1.1 million members in the state of Washington, and is part of the Regence Group, which covers 2.6 million lives in four states.

"The cost of healthcare for the consumer became fairly nominal," McWilliams says. "The proportion of healthcare that was paid out of pocket was 30% in the 1970s, and today it's below 15%. What we pay as consumers has not kept up with the rate of increase in costs. One provider said to me that consumers can go to the doctor for less than the cost of a haircut. The idea behind CDHC is to make consumers realize that they really are spending their own dollars. It's not just a mechanism to shift costs; it's meant to make them think differently."

MCO responsibility

Because managed care plans are one of the biggest links in the delivery chain, it's their opportunity and responsibility to go beyond benefit structure and provide consumers with tools to maximize their benefits, McWilliams says. Specifically, those tools would include the comparative prices of office visits or procedures, the comparative quality of hospitals and doctors, patient satisfaction ratings of their own providers, and other information to help consumers shop for value. MCOs are still getting warmed up in their efforts to flow value data to consumers, but progress is headed in the right direction.

Regence evaluates its providers' clinical performance based on industry standards, HEDIS measures and evidence-based medicine. Much of the reporting focuses on primary care physicians because that's the area where most quality measures have agreed-upon standards.

Taking the data a step further, Regence also correlates the results for efficiency with the results for quality, and according to McWilliams, has gained surprisingly insightful knowledge from combining those evaluations.

"What we found in the industrial model is that high quality always costs less, but that wasn't necessarily the case in our own analysis," she says. "There are high-quality, high-efficiency doctors, but there are also high-quality, low-efficiency doctors. It's important that we profile physicians not just on efficiency but on quality as well. Ideally, you want doctors who are both high-quality and high-efficiency."