Sunday, September 28, 2008

Business Ethics and Comparative Effectiveness in Health Care

Although no one designing a health system from scratch would create the hodge podge of employer-based insurance and thousands of insurance companies we have in the U.S., that's what we've got.

Two weeks ago, in a posting about the Hanniford supermarket chain, I expressed the hope that self-insured employers would become crucial learning laboratories about resource allocation and comparative effectiveness for the U.S. health system. This week news from two large Wyoming coal mines convinces me that this hope isn't a pipe dream.

Foundation Coal and Peabody Energy have been shopping for specialty care for their employees, making use of comparative effectiveness information. Here's a story from Foundation:
"Ken Ferguson, 54, maintains the bulldozers and heavy trucks that haul coal at the Belle Ayr mine near Gillette, Wyoming. In return, his employer, Foundation Coal Holdings Inc., provides his family with the best medical care it can buy.

Ferguson's wife, Shanna, had her colon removed last year because of chronic inflammatory disease. Foundation sent her 700 miles away to the top-ranked Mayo Clinic in Rochester, Minnesota. The company covered the $85,000 bill for the operation and follow-up reconstructive surgery and even paid for Ken's motel.

`I was at the best place with the best doctors possible,' said Shanna, 50. `And we saved money.'

So did Foundation...`Would we have saved money if Shanna did the operation locally? Maybe,' said David Crowder, a retired surgeon hired by Foundation and Peabody to cut health costs. `But would the operation have gone as well? Unlikely. It's costs down the road you have to look at.' "
Crowder used HealthGrades, a Colorado-based company that provides information on hospital quality and cost, to advise Foundation and Peabody.

What strikes me is the synergy between individual and company interests here. Ken and Shanna are happy with the care Shanna got, and the fact that (a) they saved money, and (b) Ken's employer did too. The mining company is a microcosm of wider society. Individuals want to be as healthy as possible, and society wants its members to thrive and not to go broke supporting this aim.

When health plans tried to manage care in the 1990s they were shot down for intruding on patient choice and physician autonomy. The fact that the best health plans were doing this on behalf of individuals and employers, and that better quality at lower cost served all stakeholders got overlooked in the frenzy of criticism.

For the U.S. to get a grip on its over-costing under-performing health system we need to accomplish two things. First, we need to think of our health system in terms of both numerator (individual needs and wishes) and denominator (population needs and wishes). Second, in seeking the best balance of individual and population interests, we need to use information on comparative effectiveness - both quality and cost.

We're nowhere near doing that yet in private insurance or our large public programs. But self-insured companies are moving in that direction. Each company is small, but the lessons we can learn from Hanniford, Foundation and Peabody are large. And lessons coming from the business sector, rather than the ivory tower of arcane health policy, will be listened to.

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