Richard Kronick, PhD (Health Services Research 12/7/2020)

Two Policy Recommendations

Patients will increasingly receive care from physicians, hospitals, and other health care providers that are affiliated with health systems. Yet we still know very little about how to improve health system performance. What to do? As a researcher, naturally my first answer is more research, particularly in the identification of high‐performing health systems, identifying the characteristics of those health systems, and developing the tools and creating the environment in which systems will move toward higher performance. As a former policy official, however, I am inpatient with the pace of research and suggest two courses of action.

First, we should continue the movement away from fee‐for‐service payment toward capitation, or, its poor cousin, shared savings approaches. Health systems cannot be expected to work hard at reducing the supply of hospital beds or procedurally oriented physicians when these resources are revenue centers as opposed to cost centers. Similarly, there is little financial reward to investing in activities that improve population health when payment is primarily on a fee‐for‐service basis.

Second, we should produce an annual report card on health system performance, with information on risk‐adjusted total cost of care, on performance on quality and outcome measures, and on disparities in care and outcomes for disadvantaged groups. Limitations in data availability, in our ability to measure what matters, and in our ability to risk‐adjust outcomes so as to not disadvantage those systems that disproportionately serve disadvantaged groups should make us wary about using this report card, at least initially, to adjust payment. But no health system will want to be at the bottom of this report card, and even without payment incentives, systems will work at improving their ranking. For example, if we measure and report on disparities in care and outcomes within health systems, it seems likely that systems will work on reducing disparities. As I and others have written elsewhere, there is great danger in using strong incentives to reward performance when the performance that can be measured is only a small subset of the performance that people care about. 10 But especially in a world that is increasingly dominated by large health systems, absence of accountability mechanisms is also a perilous path. Much greater levels of public investment in performance measurement and improvement will be needed to capitalize on the potential that the increasing dominance of health systems makes possible.

I still can’t tell you whether Geisinger is the highest performing health system in the United States. But I can tell you that health systems are growing in size, and are the dominant form of health care delivery in many communities. As researchers and policy makers, we can potentially leverage that growth to improve equity and quality, increase accountability, and lower costs. However, as the papers in this volume make clear, there is nothing magical about large health systems that lead to improvements, and concerted research and policy efforts will be needed to realize the potential.

READ MORE