Pay-for-quality programs mean better health care, lower costs

For decades, the Hawaii Medical Service Association (HMSA) has been on the forefront of health care reform in Hawaii.

One of our most successful initiatives is based on rethinking how we pay health care providers — in particular physicians and hospitals — for the services they provide our members. We call it "pay for quality," and we were among the first health insurers in the United States to move from the traditional fee-for-service model when we launched our pay-for-quality programs in 1997.

What "pay for quality" means is that HMSA pays providers based on how well they care for you, as well as how much care they provide. Pay for quality focuses on outcomes that improve the health and well-being of members, rather than just the number of services provided. The focus on outcomes improves the health of our members, which helps to reduce the increase in health care costs.

A recent commentary in the Honolulu Star-Advertiser questioned the value of pay-for-quality programs in Hawaii ("Health care pay-for-performance folly," July 9). It expressed doubts about the overall need for health care reform, argued that pay-for-performance programs were not effective, and questioned the ability of such programs to measure health care.

That hasn’t been our experience. To the contrary, we have found that pay-for-quality programs incentivize providers to focus on maintaining and improving the health and well-being of patients, allowing them to focus on those who need care the most.

The fact is that the fee-for-service model that’s still commonplace in the U.S. has brought us to the point where we spend almost twice as much per person for health care than most industrialized countries. And despite the billions of dollars we spend, Americans rank low on many metrics relative to residents of other industrialized nations. Further, conservative estimates point to a 30 percent waste nationally in our health care delivery system due to overuse, underuse and misuse of health resources. Reform and change are necessary.

Over the past 17 years, we’ve developed convincing evidence that the pay-for-quality model works in Hawaii. We’ve found that pay-for-quality programs have resulted in better quality care, better population health, and reduced health care costs, known as the triple aim objectives.

The measures included in HMSA’s pay-for-quality programs follow national guidelines and focus on hospital safety, preventive care, diabetes care and more. According to the American College of Emergency Physicians, hospital inpatient care is a key driver of health care costs, accounting for 31 percent of the nation’s health care expenses.

Since introducing our new pay-for-quality programs in Hawaii, and in conjunction with our partnership with Hawaii’s hospitals and physicians, we’ve seen a 10 percent drop in hospital admissions, a 13 percent drop in hospital readmissions, a significant reduction in hospital infections, and improved preventive care and cancer screenings.

There’s no question that, while challenges remain, there are many facets of both inpatient and outpatient care that can be reliably measured. These measures continue to expand and improve in partnership with national organizations, hospitals, physician organizations and specialty societies.

Our experience at HMSA and the experience of many others across the nation demonstrate the value of pay-for-quality programs, from both quality and cost perspectives. By definition, pay-for-quality programs focus on improving the health and well-being of a population and aligning incentives between insurers and health care providers.

By focusing on scientifically based, quantifiable quality measures, we’re seeing better care, and health care providers are telling us that they’re finding more satisfaction in delivering outcomes based quality care that makes a difference in the health and well-being of their patients.