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Reforming Delivery
The Talking Cure for Health Care Costs

Talking early and often with patients may be a key to health care reform. At the Upshot, Margot Sanger-Katz profiles Iora, a for profit health care company that uses intensive customer interaction to give patients more effective—and hopefully cheaper—care. The basic Iora premise is that frontloading the amount of time health care professionals spend with patients can keep those patients healthier and out of the hospital. That in theory brings down health care costs—hospital care is expensive—and Iora makes its money by taking a slice of the savings it earns for the employers or Medicare plan it contracts with (it does not take customers “off the street”):

There can be big savings from providing primary care services that keep patients in poor health out of the emergency room and the hospital by, say, making sure a diabetic’s foot wound is treated before expensive amputation is necessary. One of Dr. Fernandopulle’s early practices, which treated high-risk casino workers in Atlantic City, was described in The New Yorkerin 2011. The practice was able to reduce hospitalizations for its patients 40 percent and save the casino workers’ union 12 percent in total health care spending. To work, it required persuading the union to pay much higher, per patient monthly fees for primary care medicine instead of the usual system, paying doctors by the visit.

The company has 11 practices nationwide, and wants to scale up even more. There are reasons to be skeptical about Iora. At one of its practice, the company says that “total spending was down 12 percent, with hospitalizations down 37 percent, compared with the control group.” But one of the company’s early adopters, Dartmouth College, doesn’t know three years in whether it’s really saved money by switching to Iora, and there’s not much other information available about whether other customers have saved.

Still, there’s a lot to like about Iora. Chronic illnesses, especially when poorly managed, are a big driver of health care costs. Keeping Americans in general, but especially those with chronic illnesses, out of hospitals should indeed be a central goal for health care professionals in the coming years. Sanger-Katz quotes one anecdote in which Iora employees found out a diabetes patient wasn’t taking her medicine because the pills were too big. Iora arranged for her to get smaller pills. That’s the kind of thing that can make a big difference in managing chronic illnesses better, and it doesn’t take a doctor to do. Insofar as a lot of the help patients need to stay out of the hospital isn’t highly technical, there could be a huge role for health care workers who aren’t trained as doctors—or paid as much as them.

In basing its profits in part on how much it saves customers and reduces hospitalizations, Iora is similar to the so-called Accountable Care Organizations that the ACA set up to bring down the cost of Medicare. But it’s better to let for-profit companies like Iora, funded by venture capital money, experiment with this approach before subsidizing it with federal money. Iora will have to prove itself in the market. We’ll be watching it with keen interest.

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  • FriendlyGoat

    For-profit experiments by employers and insurers using provider networks, pre-admission review, claim-management firms, tiered-price pharmacy, wellness plans, nurse hotlines, and HMO’s have been going on for 35 years. How’s that been working out?

  • lord acton

    My dear goat, I have to agree with you on this.

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