Consumers Drive Revolution in Health-Care Costs, Results

Posted by Kristen Lepore on Sep 27, 2012, 2:11:00 PM

Can consumers really change a health-care market that threatens the economic well-being of the country?

Health Care CostsMany observers find it preposterous that employers and workers could change 17.9 percent of the American economy by shopping for health care the way they shop for automobiles or houses.

But a growing body of evidence suggests that consumers are, in fact, exerting pressure that is moderating health care costs and improving the quality of care. More importantly, the same evidence points to the fact that the consumer revolution in health care will take place much faster and be more pervasive than anyone imagined.

Consider the following developments:

  • The Wall Street Journal reported this morning that Sears Holdings Corporation and Darden Restaurants Inc. (parent of Olive Garden and Red Lobster) are making radical changes in the way they provide health benefits to employees. The two companies plan to give employees a fixed sum of money and allow them to choose their medical coverage and insurer from an online marketplace. The plans, which parallel the change from company pensions to 401(k) plans, are intended to put more control over health benefits into the hands of employees.
  • UMass Medical Center in Worcester this week announced layoffs as academic medical centers continue to cope with what UMass President John O’Brien called “health insurers … channeling members to lower-cost treatment facilities making it harder for teaching and safety-net hospitals such as UMass Memorial Medical Center to compete.” The shift is expected to accelerate as a growing number of employers offer tiered health insurance products that offer discounts of at least 14 percent for patients who seek treatment in high-quality, lower-cost community health facilities.
  • A new PBS documentary entitled Money and Medicine documents the successful efforts of hospitals such as Intermountain Medical Center in Salt Lake City Utah to change the behavior of both doctors and patients in a way that improves outcome and reduces costs. The initiative covers everything from discouraging unnecessary and dangerous elective inductions at birth to keeping terminally ill patients comfortable at home. The status quo is not an option. “We will create a financial crisis of a size sufficient to destroy the United State of America,” says Intermountain Chief Quality Officer Dr. Brent James. “We have no choice. We will solve the problem.”

AIM and its thousands of member employers maintained throughout the recent debate on the new Massachusetts health cost law that it is possible to improve care and simultaneously moderate cost in an industry where one-third of all spending is wasteful or inappropriate. It now appears that millions of consumers, doctors, employers and insurers around the country have reached the same conclusion.

That’s food for thought for employers uneasy about trying to convince workers that more medical care and cost does not equate to better care. That question has been answered.

Watch Money & Medicine on PBS. See more from Need To Know.

Topics: Health Care Costs, Issues

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