Re: Value-Based Insurance Design: Quality Improvement but No Cost Savings

Abstract

available at http://jurology.com/ Editorial Comment: As the Affordable Care Act gets rolled out, we are going to hear more about value based purchasing. Simply put, the concept behind this is to increase the quality of care while decreasing the cost, effectively improving value. Novel reimbursement mechanisms and delivery systems are being developed by payers to implement these value based insurance strategies. Soon payers and/or accountable care organizations will approach urologists to participate in these new programs. When you consider whether to participate, it is useful to know if these programs will achieve the goals that the payers want. This study implies that, in fact, these programs do have a positive impact on quality but do not reduce costs. In fact, some of the programs reviewed in this 0022-5347/14/1913-0761/0 THE JOURNAL OF UROLOGY © 2014 by AMERICAN UROLOGICAL ASSOCIATION EDUCATION AND RESEARCH, INC. http://dx.doi.org/10.1016/j.juro.2013.11.077 Vol. 191, 761-762, March 2014 Printed in U.S.A. www.jurology.com j 761 762 SOCIOECONOMIC FACTORS, UROLOGICAL EPIDEMIOLOGY AND PRACTICE PATTERNS article actually had increased costs. To me, this is the great fallacy associated with the concept of value based purchasing. High quality products usually tend to cost more money than low quality products. The same holds true in health care. David F. Penson, MD, MPH Suggested Reading Borofsky MS, Ohmann EL and Makarov DV: Transition to value based care. AUA Update Series 2013; 32: lesson 31, pp 310e319. Re: Increases in Consumer Cost Sharing Redirect Patient Volumes and Reduce Hospital Prices for Orthopedic Surgery J. C. Robinson and T. T. Brown Berkeley Center for Health Technology, School of Public Health, University of California, Berkeley, California Health Aff (Millwood) 2013; 32: 1392e1397. Abstract available at http://jurology.com/available at http://jurology.com/ Editorial Comment: Although the authors describe reference pricing in orthopedic surgery, there is no doubt that this is a harbinger of things to come across all surgical disciplines. This study shows what happened when the California Public Employees Retirement System (CalPERS) instituted a $30,000 payment limit on hospital allowed charges for knee and hip replacement surgery. Employees covered under the CalPERS plan who were planning to undergo these types of procedures were given a list of hospitals that would perform the surgery for less than the limit. Employees who used one of these hospitals were only responsible for their usual copay. If they went to a hospital that was not on the list, employees were responsible for the usual copay up to $30,000 and any additional charges over the $30,000. In other words, if the hospital charged $40,000, the employee would pay the copay on the $30,000 plus an additional $10,000. The results are not at all surprising—surgical volumes among CalPERS employees at the low price hospitals increased by 21%, while volumes at the high price hospitals decreased by 34%. It is easy to imagine a similar program applied to robotic prostatectomy. Urologists need to be aware of charges at their hospitals and, if they are higher than the community average, either work with hospital administrators to reduce the charges or get privileges at a lower cost hospital. Patients will make decisions based on the cost to them, even if it means leaving a doctor they really like. David F. Penson, MD, MPH