Quality Health Care Can Result in the Cheapest Health Insurance Posted: December 15th, 2009

Paying Incentives to Physicians to Provide Quality Health Care Can Help to Achieve the Cheapest Health Insurance.

As part of the quest for the cheapest health insurance, providers are trying to improve both the quality of their care and incorporate evidence based medicine into their practices.

High quality care results in better patient outcomes, which can lead to lower costs. This also applies to evidence based medicine which uses data and statistical studies to help physicians determine the best course of treatment for many conditions.

Why This Is Important

Quality care is needed to help reduce the medical costs for the 3% of the population that accounts for 50% of medical spending in this country. In particular, money can be saved by properly treating long term chronic diseases that are associated with high costs.

Paying Incentives for Quality Care

The effort to reduce costs is so important, especially with the wave of baby boomers soon to enroll in Medicare. In an effort to bring costs down, Medicare is now providing additional payments to physicians as incentives to report quality indicators.
The incentives, set at 1.5% above the allowable charges for services that data is provided for, were established by Congress under the Tax Relief and Health Care Act of 2006.

Another Medicare initiative, starting in 2011, will link providers' reimbursement payments to the quality of care for patients with End Stage Renal Disease.

Providers Participating in Large Numbers

More than 85,000 providers participated in 2008, receiving over $92 million in incentives above their regular reimbursement. This is compared to $37 million paid in 2007.

In order to increase the number of providers reporting data, the initial payment of 1.5% of the allowable Medicare payment has now been increased to 2% of allowable reimbursement. Also, the number of measures studied has increased from 73 to 153.

Private Insurers Also Seeking to Improve Quality

With their profit margins narrowing, many private insurers are also seeking ways to control costs. Many hospital payments are already based on a prospective payment system, in which a set fee is paid per hospitalization, based on the diagnosis. Reducing costs through higher quality patient care can result in better operating margins for hospitals.

Some insurers are now extending this concept to their network of doctors by paying them incentives for better patient care. Reducing overall costs by keeping their patients healthier will provide the cheapest health insurance.

Sanford Ellowitz