While the United States has the most expensive health care system, it is fairly inaccessible and the quality of care falls short when compared to many healthcare systems in the world. Statistics obtained from The World Bank’s 2013 database show that the U.S. has the highest health care costs of any industrialized nation. In a report released by The Common Wealth the U.S. consistently underperformed relative to other industrialized countries on most dimensions of performance indicators (Davis, Stremikis, Squires, & Schoen, 2014). This report ranked the overall U.S. health care system last amongst the 11 countries surveyed. High costs and relatively low quality has become a major cause for concern. Several programs have been put in place in an effort to cut down on costs, while improving the quality of care delivered. Examples of such programs are Healthcare Data Information Set (HEDIS), HMOs, and most recent the Patient Protection and Affordable Care Act (PPACA). HEDIS is an accreditation program that was initiated in 1991 as a centralized database for employers to assess the quality of Insurance and Healthcare providers nationwide. HEDIS forth strict regulations and benchmarks that must be met and maintained in order to be HEDIS accredited. HEDIS measures are divided into eight domains: effectiveness of care, access of care, satisfaction with care experience, health plan stability, use of service, cost of care, and informed healthcare choices. These measures collect data based on specific medical conditions. The particular conditions traced include but are not limited too: controlling high blood pressure, comprehensive diabetes care, and breast cancer (Schultz, 2011). This research paper takes an in depth look at HEDIS, its costs, and whether or not the savings achieved through improved quality of care after applying HEDIS surpass the cost of its implementation. The data researched in this paper focuses on the quality measures provided for the care of Diabetes; assuming that the outcomes within Diabetes will be reflected throughout the many chronic illnesses HEDIS evaluates.
Medical Loss Ratio (MLR) is “collected data on the proportion of premium revenues spent on clinical services and quality improvement used in the Affordable Care Act (ACA)” (CMS.gov). MLR is a basic financial measurement used in the ACA to encourage health plans to provide value to enrollees. For example, if an insurer uses 85 cents out of every premium dollar to pay its customers' medical claims and activities that improve the quality of care, the company has a medical loss ratio of 85%. A medical loss ratio of 85% indicates that the insurer is using the remaining 15 cents of each premium dollar to pay overhead expenses, such as profits, administrative costs, salaries, marketing and agent commissions. Overall implementation of the MLR has the ACA forcing insurance companies to become more efficient. It is common opinion the rising costs of healthcare is largely due to fragmented delivery of healthcare, which has resulted from the current fee-for-service system. Many concur that managed care, is the solution to stabilizing costs and improving quality. Most models of managed care focus on preventative medicine, effective diagnosis, and increasing out-of-pocket consumer costs, and seamless flow of information across providers. HEDIS covers these areas and many more in its report. Based on HEDIS regulations, HEDIS measures are divided into eight domains: effectiveness of care, access of care, satisfaction with care experience, health plan stability, use of service, cost of care, informed choices and health plan descriptive information (Shultz, 2011). Out of the eight domains, both effectiveness of care and use of services are presumed to have the most significant effect on the overall cost of delivery. Fee-For-Service gives providers an incentive to perform unnecessary diagnostic tests and procedures. Over diagnosis is a commonly accepted cause...
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