Provider Risk and Quality of Care

By April 25, 2019 Commentary

One way to encourage providers to use health care dollars prudently is to place them under financial risk, either through outright capitation for a range of services or by performance against budget targets.  Concerns obviously exist about whether such arrangements might impact the quality of care delivered.  The Integrated Healthcare Association examines California providers who share financial risk and attempts to understand the cost and quality effects of such arrangements.   (IHA Atlas)    The analysis was based on 7 plans with 7.2 million lives.  The authors categorized risk by no financial risk at all, professional services risk (that is, physician and other outpatient services) and full-risk.  The researchers used a composite of eight clinical measures to assess quality (as usual, not clear how this few measures, and these types of measures, actually identify better outcomes).  The composite score for no-financial risk providers was 58%, for those with professional services risk, 65.6% and for those with full risk, 67%.   Level of risk was also associated with slightly lower cost of care.  No-risk providers averaged an adjusted $4589 per member per year; professional services risk-bearers, $4501, and full-risk providers, $4428. There was some geographic variation in these cost results.  Risk-bearing providers had a modestly better performance looking solely at prescription drug costs as well.  These results suggest that, at least in California, providers being at financial risk is not inconsistent with maintaining, or even improving, the quality of care.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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