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Cost and quality trends in direct contracting arrangements
Alan Lyles1, Jonathan P Weiner, Andrew D Shore
1Health Systems Management faculty, School of Public Affairs, University of Baltimore, USA.
Health Affairs (Project Hope)
|March 20, 2002
Summary
The Buyers Health Care Action Group's (BHCAG) Choice Plus initiative demonstrated effective cost containment in healthcare through direct contracting and consumer choice, maintaining or improving quality indicators.
Area of Science:
- Health Services Research
- Healthcare Management
- Economic Analysis of Healthcare
Background:
- The Buyers Health Care Action Group (BHCAG) implemented the Choice Plus initiative in 1997.
- This initiative aimed to reform healthcare delivery through direct contracting and consumer choice.
- Previous analyses lacked empirical data on the initiative's impact.
Purpose of the Study:
- To conduct the first empirical analysis of the BHCAG's Choice Plus initiative.
- To evaluate the initiative's effects on healthcare costs and quality.
- To assess the performance of an employer-to-provider direct contracting and consumer choice model.
Main Methods:
- Empirical analysis of the Choice Plus initiative.
- Examination of cost data (hospital, ambulatory, pharmacy) post-case-mix adjustment.
- Assessment of process-oriented quality indicators and consumer satisfaction.
Main Results:
- Hospital costs decreased significantly after case-mix adjustment.
- Ambulatory care costs experienced a modest increase.
- Pharmacy costs saw a substantial rise.
- Process-oriented quality indicators remained stable or showed improvement.
Conclusions:
- The BHCAG's Choice Plus model successfully contained healthcare costs.
- The initiative did not result in measurable adverse effects on quality.
- Direct contracting and consumer choice models show promise for healthcare reform.