Minnesota coalition plans to give cash incentives for provider performance based on outcomes and practice parameters - Issues & Trends - Business Health Care Action Group, Minneapolis

Focusing on practice parameters and out-comes-based medicine as a means of improving the quality of health care, employers are building cash incentives into their provider payment schedules.

The Business Health Care Action Group, Minneapolis, an employer coalition that includes 14 major Twin Cities corporations, has engaged GroupCare Consortium, a recently merged provider coalition in Minnesota, to provide health insurance to the coalition's 55,000 employees and their dependents. The employer coalition will pay the providers more if they improve outcomes by using practice parameters and preventive health care screening techniques.

Under the arrangement signed with the consortium, all 14 companies will share a single administration system to streamline enrollment and give all physician groups in the network immediate access to information, such as treatment standards, medical records, and appointment schedules. Fred Hamacher, vice president of compensation and benefits for Dayton Hudson Corp., and spokesperson for the BHCAG, says that under the new system, the consortium will collect group health data so that outcomes can be measured and new practice guidelines developed.

The consortium was set up by Group Health Inc., Minneapolis, Minnesota's largest HMO; the Mayo Clinic, a medical specialty and teaching organization in Rochester, Minn.; Park Nicollet Medical Center, in Minneapolis, which operates 17 clinics in the metropolitan Minneapolis area; and MedCenters Health Plan, Minneapolis, the state's third largest HMO. The consortium currently uses as many as 36 protocols that are based on practice parameters developed by medical societies.

Toward accountability

The move toward practice parameters is a step away from the inefficiencies of managed care, Hamacher says. "We are forming a partnership in a nonconfrontational manner so that we will know what sort of care is being provided, know what the quality of care is, and know that the provider is accountable." The employer coalition also will reduce its annual health care expenditure by at least 10%, he says, and realize a 10% to 20% reduction in administrative costs.

George Halvorson, president and CEO, Group Health Inc., and its subsidiary GroupCare Inc., says the consortium is "well down the road to improving the quality of health care." Working with the employer coalition, the consortium will use existing parameters where appropriate, but also will produce new guidelines and protocols as required.

Halvorson says that parameters offer employers "a last chance to do something meaningful with health care." He adds, "Every time that we have developed a practice protocol or guideline and applied it, we have had two outcomes-the quality of care has improved and costs have been lowered." Providing health care according to practice parameters and protocols could also save the employer coalition "millions of dollars." The savings will result from a reduction in the amount of inappropriate care, in addition to early detection of diseases, such as cancer, as a result of increased preventive health screening.

Rewarding quality

Halvorson says the agreement between the consortium and the employer coalition is a break with tradition. "Until now health care providers have been rewarded for excess volume of services not improved outcomes and that is what these employers want to change." The coalition wants outcomes-based medicine and is willing to reward improved quality outcomes, he says. "They are giving cash incentives to use practice parameters and are changing the way that health care is rewarded in this country."

To ensure that the parameters it produces are used as standards, the consortium has established the Institute for Clinical Systems Integration. The institute will be managed by senior physicians recruited from Group Health Inc.; the Mayo Clinic; Park Nicollet; and MedCenters Health Plan. "The institute will do implementation and monitoring to ensure that practice parameters do not stay on the bookshelf-- we want to ensure that they are used," Halvorson says.

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