Cost and Quality Relationship Memo
Many of the reforms contained within the Patient Protection and Affordable Care Act
(PPACA) are aimed at reducing health care costs and improving quality without rationing care, cutting benefits or reducing eligibility. Starting with the populations that suffer from the most difficult health conditions and have the most medical expenses makes sense. If designed and implemented properly, these reforms hold the potential to transform not only their lives, but also to serve as models for other populations. However, this promise cannot be realized without the informed and meaningful participation of patients, families and their advocates.
The problem: our fragmented system
There is widespread acknowledgement that our current health care system is fragmented, failing to consistently deliver high quality care, particularly to certain vulnerable people, such as: those with multiple chronic conditions, the frail elderly, people who are dually eligible for Medicare and Medicaid, and members of a racial or ethnic minority. These populations tend to see more physicians, have more office visits and take more medications. Too often, there is no one to coordinate this care. This failure to coordinate leads to poor care, such as:
• Duplicative tests or procedures
• Medication errors
• Avoidable hospital admissions
• Preventable hospital readmissions
• Unnecessary nursing home placements
This fragmentation comes at a cost. Overall, health care costs represent 16 percent of our
Gross Domestic Product. In 2009, we spent $2.9 trillion on health care. The cost of health care services provided to vulnerable populations is disproportionate to their numbers. For instance, 96 percent of Medicare dollars and 80 percent of Medicaid dollars are spent on patients with multiple chronic conditions. And, Medicaid and Medicare spend four times as much for the nearly nine million dually eligible beneficiaries than for non-duals. This disproportionate spending is in part
(PPACA) are aimed at reducing health care costs and improving quality without rationing care, cutting benefits or reducing eligibility. Starting with the populations that suffer from the most difficult health conditions and have the most medical expenses makes sense. If designed and implemented properly, these reforms hold the potential to transform not only their lives, but also to serve as models for other populations. However, this promise cannot be realized without the informed and meaningful participation of patients, families and their advocates.
The problem: our fragmented system
There is widespread acknowledgement that our current health care system is fragmented, failing to consistently deliver high quality care, particularly to certain vulnerable people, such as: those with multiple chronic conditions, the frail elderly, people who are dually eligible for Medicare and Medicaid, and members of a racial or ethnic minority. These populations tend to see more physicians, have more office visits and take more medications. Too often, there is no one to coordinate this care. This failure to coordinate leads to poor care, such as:
• Duplicative tests or procedures
• Medication errors
• Avoidable hospital admissions
• Preventable hospital readmissions
• Unnecessary nursing home placements
This fragmentation comes at a cost. Overall, health care costs represent 16 percent of our
Gross Domestic Product. In 2009, we spent $2.9 trillion on health care. The cost of health care services provided to vulnerable populations is disproportionate to their numbers. For instance, 96 percent of Medicare dollars and 80 percent of Medicaid dollars are spent on patients with multiple chronic conditions. And, Medicaid and Medicare spend four times as much for the nearly nine million dually eligible beneficiaries than for non-duals. This disproportionate spending is in part