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Employers to increase pressure on doctors to justify costs

A survey of self-insured companies finds that many support efforts linking physician pay to quality and price measures.

By Bob Cook — Posted March 25, 2013

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Self-insured employers are expecting to turn their attention more frequently to physicians as they try to find ways to reduce the cost and increase the quality of their workers’ health care.

The likeliest trends that 583 companies, representing $103 billion in annual health spending, expect to see in the next five years are more health care price transparency; more new technologies, such as e-visits and telemedicine, to increase access; physician pay based more on quality, efficiency and outcomes; more benefit designs based on the value or cost of services; and more care delivered through accountable care organizations, patient-centered medical homes and other “highly coordinated” models.

The companies, surveyed by consultancy Towers Perrin and the National Business Group on Health, are looking at the value of physicians because outpatient care is where they spend most of their health claims dollars, said Helen Darling, president of NBGH, an employer coalition. If employers “are going to have an impact on bending the curve on increased costs, that’s where they’ll have to focus,” she said.

That is in addition, Darling said, to employers’ focus on making their employees more responsible for costs and trying to train them to have the eye for value in health care that employers want. In 2013, according to the Towers Perrin/NBGH survey, self-insured employers’ average health care costs per employee are expected to be $12,136, up 5.1% from $11,457. That would be the lowest increase in 15 years, driven in large part by employees shelling out more from their own pockets.

In the last three years, according to the Towers Perrin/NBGH survey, the employees’ share of out-of-pocket costs — including deductibles and premiums — went from 34% to 37% of the total cost per employee. Employees contribute 42% more to their health care than they did in 2008, compared with a 32% rise in the employer share. With employee pay going up only 1.6% during the last three years, taking in the slow recovery after the 2007-09 recession, employees are finding raises more than eaten up by health cost increases, Darling said.

She said employers want to see more doctors in plans that, for example, group physicians based on efficiency and quality metrics so that the onus is on employees to determine whether they want to pay even more out of pocket to see physicians who aren’t meeting those marks.

But the idea is not to punish doctors merely based on cost, Darling said. Companies have “learned more about what’s driving costs and increasing quality,” she said. “They’ve become more sophisticated about looking at solutions.”

Darling said she hopes physicians work in “partnership” with employers in finding ways to provide the right care at the right time, for the right price, and that they will have discussions with patients about the value — or lack thereof — of certain tests and procedures.

Darling in particular spoke positively about the American Board of Internal Medicine Foundation’s Choosing Wisely initiative. It has a list, so far, of 135 tests, procedures and other medical interventions that physicians are supposed to think twice about ordering because they are ineffective or unnecessary. The list was put together through submissions from specialty medical societies.

“People trust their doctors, so physicians are in a crucial role,” Darling said. “We’re glad to see physician leadership on this.”

An American Medical Association Council on Ethical and Judicial Affairs report in 2012 declared that wise stewardship of limited health resources is an ethical obligation for physicians. The report defined stewardship as centered on what is best for the patient, with physicians using their knowledge on the efficacy of treatments, tests and procedures, and their short-term and long-term costs, to determine what will improve a patient’s health without spending too much or too little.

The latest Towers Perrin/NBGH report notes that 85% of employers are committed to providing health benefits at least during the next five years, even though the Affordable Care Act, in theory, would allow them to drop coverage and have employees get their insurance through state-based exchanges. However, employers said they were concentrating on reining in costs before an excise tax on high-costs plans is scheduled to go into effect in 2018 under the ACA.

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