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Centers of Excellence. The Way Health Care Gets Better™. Portrait of a Dysfunctional Market. Health Care Market Place Government pays for over 40% of the care delivered in the United States

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Centers of excellence

Centers of Excellence

The Way Health Care Gets Better™

Portrait of a dysfunctional market
Portrait of a Dysfunctional Market

  • Health Care Market Place

    • Government pays for over 40% of the care delivered in the United States

      • The Federal Government dictates what fees will be paid to providers for Medicaid and Medicare recipients

      • Economic principal of supply and demand to determine price is ignored (increased volume for lower price)

      • No incentives to use efficient, quality providers

      • Results in a cost shift to the private sector

  • Cost and quality information not available to consume to foster a competitive marketplace

  • Over Utilization

    • Financial incentives encourage more services

Why centers of excellence

2.93% of the members used 50.7% of the claims dollars

12.63% of the members used 79.3% of the claims dollars

Why Centers of Excellence?

Federal hhs four cornerstones
Federal HHS “Four Cornerstones”

  • Connecting the System Standards and support for e-health.

  • Measure & Publish Quality Partner with providers to get measures that work.

  • Measure & Publish Price “Episodes of Care” model.

  • Create Positive Incentives Reward those who offer, provider and choose value (Quality/Price).

“Every American should have access to a full range of information about the quality and cost of their health care options”

- HHS Secretary, Michael O. Leavitt

Some enterprises found centers of excellence cut costs by 25 40
Some Enterprises Found Centers of ExcellenceCut Costs by 25-40%

Procedure: Several

Procedure: Cardiac, Spine, Orthopedic & Transplant

Procedure: Cardiac & Orthopedic

Procedure: Orthopedic

Procedure: Cardiac & Orthopedic

Creation of centers of excellence for episode of care payment
Creation of Centers of Excellence for episode of care payment

  • Global Fees for Episodes of Care

    • Includes all services to complete episode

  • Episodes with Complications

    • Complicated cases revert to fee for service

  • Payment Systems

    • Global fee paid to facility for disbursement

    • Global fee based on episode benchmark

      • 20% Physician withhold

      • Complete Episode

        • Physician receives withhold plus 50% of savings if total costs are below benchmark

To enable the creation of centers of excellence a robust data base is required
To enable the creation of Centers of Excellence a robust Data Base is required

  • Cost Effective Quality Providers Selected from Database

    • Health Insurers Data Base

    • All Payer Data Base

    • Utah Health Information Network

  • Designated Centers of Excellence

    • Chronic conditions

    • Outpatient surgery

    • Inpatient surgery

  • Centers of Excellence Increases Volume to Designated Providers

    • Increased volume used to negotiate global fees

Physician review
Physician Review Data Base is required

Specialty Episode Case-Mix Summary Top ETGs, by Total Costs (Complete Episodes of Care)


Example fee for service p rostate procedure
Example: Data Base is requiredFee-for-service Prostate Procedure

Results centers of excellence for prostate
Results: Data Base is requiredCenters of Excellence for Prostate

  • Total cost non-Center of Excellence: $38,533 (Patient paid $14,263)

  • Total cost Center of Excellence: $14,451 (Patient paid $1,298)

Center of excellence member engagement
Center of Excellence Member Engagement Data Base is required

Online Consumer Guide

  • Procedure Education

  • List of DSP (Designated Service Plan) Providers

  • Favorable Co-Payments for DSP Providers

  • High, low and average cost for procedures

Consumer guide
Consumer Guide Data Base is required