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August 27, 2015

Asking the Right Question About Cost

Almost every employer I know asks one basic question about healthcare: How much does it cost? That’s a great opening question, and it’s equally important to ask the next logical question: What do I really get for that cost?

Almost every employer I know asks one basic question about healthcare: How much does it cost? That’s a great opening question, and it’s equally important to ask the next logical question: What do I really get for that cost?

The answer to that second question usually isn’t as straightforward as you’d think. As I talk with employers, I’d like to suggest they delve deeply into the “What do I get?” question. From the perspective of someone who daily lives and breathes the provider-side improvements that are changing healthcare from the inside out, I have a lot invested in the response.

For starters, employers should be satisfied they are truly taking steps to reduce their overall spending on healthcare and not just a little here or a little there. The best way to do that is to take meaningful action to help employees get and stay healthy. Healthy people use healthcare services less often, reducing the number of claims. The least costly claim is no claim at all, right? And healthy employees are more productive employees, too!

The best way to approach overall employee health is to look at the big picture, that is, the total cost of care. Then look at individual line items. A big picture look that encompasses which providers and their organizations are best at keeping employees healthy, which organizations have data to support cost claims, and what payment methods are used is where the rubber meets the road. Sure, it makes sense to focus on individual line item costs, but too much focus there obscures the big picture, the big expense and how it’s getting paid for.

Employees use hundreds of types of healthcare services. A good deal in one area of care is likely only a small portion of a company’s overall healthcare spend. Employees do more than have knees replaced or hearts surgically repaired. They see doctors for annual physicals, a bout of strep throat, a sudden broken bone, unexpected cancer treatment and ongoing blood pressure management. They may be hospitalized. It may take months to get diabetes under control.

The good news is that it’s getting simpler for an employer to investigate healthcare cost and quality. That’s why it’s encouraging that Wisconsin’s healthcare marketplace is moving into new spaces, with new players who are exploring and highlighting healthcare value. Insurers and providers are lasered in on innovative partnerships that open pathways for more people to experience overall better healthcare quality and cost-transparency.

On the insurance side, statewide players like Anthem Blue Cross and WPS are proactively seeking partnerships with cost-effective, high quality providers. They’ve looked at independent data from third parties like Medicare (CMS), Benefits Services Group and the Wisconsin Collaborative for Healthcare Quality and agreed: Patients who see healthcare providers with demonstrated track records for providing higher quality, lower cost care are healthier.

On the provider side, ThedaCare and other like-minded providers have come together in a new statewide network called AboutHealth. We’re creating new possibilities for insurers to develop products that cover and pay for broad-based care that’s reliably high quality and cost-effective.

As a founding member of AboutHealth, ThedaCare is excited by this greater focus on value. It’s huge. It means that as providers continue to improve quality and create efficiencies, employers have new opportunities to look differently at health plans. They can partner with providers and insurers who understand that employees with controlled diabetes can work longer, keep their eyesight and maintain healthy limbs. They experience bottom line benefits when an employee is hospitalized and they have a higher confidence that the chances for readmission due to infection or complications are low. One hospital stay is much less expensive than two or three, and an employee who recovers sooner is back at work sooner, too.

This is intriguing and important. It’s critical, really, to creating a healthier workforce, healthier communities and healthier bottom lines for business. Want to learn more? I can put you in touch with local folks who’d be happy to talk about how healthcare and health insurance are changing – for the better.

Dr. Dean Gruner is president and CEO of Appleton-based ThedaCare. To send your thoughts to Gruner, email