From Tom's Desk
From the Journal of Managed Care.
Healthcare services funded through a risk-adjusted, capitated model generated better results using fewer resources, while spending less money than a fee-for-service model over three years in matched populations.
The study, performed by Optum, looked at two physician groups in Portland, Oregon for a three year period. It is the best designed, highest powered study of it's type I've yet seen; the only real criticism is the risk of bias from the funding source.
The risk-adjusted group had a statistically significant 6% higher survival rate, with 11% less emergency room utilization and 12% lower inpatient utilization, for a savings of $2M per 1000 enrollees.
This data, biased though the sponsor might be, supports the idea that the Federal government can off-load financial risk for its healthcare commitments to a private insurer, use a risk-based design to fund the delivery of that healthcare and have that insurer generate a sustainable profit while improving outcomes all round.
No surprise to me, I lived it for 15 years. I saw it first hand.
How did was the insurer able to do it?
By giving their contracted delivery organizations a financial interest in the net performance of the contract. Organizations which, in turn, were willing to align their clinician's interests with similar financial incentives.
Far from withholding care to make a buck, the clinicians were empowered to unlock their critical problem-solving skills to serve their patients...and look at the result.
Of course, one study funded by an organization with potential bias isn't a game changer, no matter how statistically powerful and well designed...even with the confirmation bias of my decades of personal experience.
But it should make you think.
What could you do under similar circumstances?