Costs Of Care Primer

All doctors should understand how the decisions they make impact what patients pay.

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Harnessing Decision-Support Systems to Deflate Medical Bills

Neel ShahExecutive Director

Mary ZarkhinaVP Research

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The Opportunity

Every 30 seconds medical bills bankrupt an American family

Doctors decide what goes on the bill

Many commonly ordered tests and treatments do not improve health outcomes

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The Opportunity

“We seem to have as much as $700 billion a year in health care tests and services that are unnecessary, that don't improve health outcomes, and that just add to costs ... The way to get at that has been started in the stimulus bill in which we invest [$20 billion] in health information technology, we start to better measure what works and what doesn't, and we start to pay for better care rather than more care.”

Peter Orszag, Director of the White House Office of Management & Budget. February 19th, 2009

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Medical Decision-Making

Safety

Efficacy Cost

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Top-Down Solutions

“Nonclinical” Administrators

Clinical Healthcare Providers

information• Managed care

• Pay-for-performance

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Bottom-up solutions

• Consumer-Driven Healthcare

• Decision-support systems

• consumer agency

• consumer capacity

• provider autonomy

• price transparency

Limitations

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Our Solution

Transparent price information at the point of care

• Sensitive to provider workflow

• Sensitive to health delivery business operations

User-interface Decision support

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Our Solution

Transparent price information at the point of care

Cost Charge Price

• Hospital accounting ledgers

• Payer claims databasesreconciled estimate

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Display

Transparent price information at the point of care

• Coded order-of-magnitude

• Displayed in the order-entry menu

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Display

Transparent price information at the point of care

• Displayed explicitly when quantifiable, else a referenced clinical guideline

• Displayed in a second-level box

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Display

Transparent price information at the point of care

• Coded with a provided benchmark

• Displayed with efficacy in a second-level box

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Setting: Emergency Room

Transparent price information at the point of care

• Emergency rooms operate in deficits

• Patients are most likely to be underinsured

• Physicians are salaried

• Workflow incentivizes formulaic ordering

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Value Chain

Costs of Careservices

Physicians(target)

Patients(1° beneficiary)

Emergency Rooms(2° beneficiary)

Healthcare System(3° beneficiary)

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Our Goals

Costs of Careservices

Physicians(target)

Patients(1° beneficiary)

Emergency Rooms(2° beneficiary)

Healthcare System(3° beneficiary)

• Drive a paradigm shift in medical decision-making towards cost awareness

• Prevent personal bankruptcy caused by medical bills

• Create a “bottom-up” approach to curbing cost-growth

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Measuring Impact

Costs of Careservices

Physicians(target)

Patients(1° beneficiary)

Emergency Rooms(2° beneficiary)

Healthcare System(3° beneficiary)

• Provider practices

• Patient benefits

• System-level benefits

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Our Theory of Change

All doctors should understand how the decisions they make impact what patients pay.

We believe that drawing an explicit link between these decisions and the potential to bankrupt the patient in front of them will induce doctors to consider costs. We believe doctors who consider costs will continue ordering tests and treatments patients need to get better, but will be less likely to order superfluous tests that inflate medical bills unnecessarily.

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Our Strategy: Nonprofit Learning Enterprise

• 6 month pilot in a local emergency department

• Academic medical center

• Safety net hospital setting

• Start-up through research grants

• Aligned private foundations and government RFPs

• Analysis of provider cost-sensitivity

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Our Team

Neel Shah MD, Executive Director

Mary Zarkhina, VP Research

Jeff La Fave MBA, VP Finance

Devin DeCiantis BBA, VP Strategy

• Former Harvard Law Health Policy Fellow

• Inaugural MHDC Elliot Stone Fellow

• MD and MPP candidate, Harvard Kennedy School of Government

• Worked in health management and IT consulting at Accenture

• Conducted a utilization and profitability analysis in academic emergency department

• Master of Health Policy and Management candidate, Harvard School of Public Health

• Former cost analyst, Congressional Budget Office

• Former manager of citywide consumer credit education campaign

• Two former business degrees and MPP candidate, Harvard Kennedy School of Government

• Worked as a strategy consultant for McKinsey & Co.

• Former investment banker, UBS

• Managed digital media for the Walrus Foundation

• MPP candidate, Harvard Kennedy School of Government

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Thank you

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© Copyright 2009

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