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Guest Article

Deloitte logo

(From the December 4, 2006 issue of Deloitte's Washington Bulletin, a periodic update of legal and regulatory developments relating to Employee Benefits.)

Administration Asks Employers for Help Achieving Four Cornerstone Goals for Value-Driven Health Care


Secretary Mike Leavitt of the U.S. Department of Health and Human Services (HHS) on November 17, 2006 called on private employers to "commit to four steps to improve health care quality and reduce health costs by improving information in the health care sector." The President issued an executive order earlier this year directing certain federal health care programs -- including Medicare, the Veterans Affairs health system, and the Federal Health Benefits Program -- to begin taking steps towards achieving the same four goals in 2007. But getting private employers involved is critical because they are the largest source of health coverage for Americans, and thus have the potential to effect change in the health care system.

According to the HHS, there are four cornerstones of health care transparency.

  1. Connecting the System: Every medical provider has some system for health records. Increasingly, those systems are electronic. Standards need to be identified so all health information systems can quickly and securely communicate and exchange data.
  2. Measure and Publish Quality: Every case, every procedure has an outcome. Some are better than others. To measure quality, health care payers (employers, federal and state governments, insurers, etc.) must work with doctors and hospitals to define benchmarks for what constitutes quality care.
  3. Measure and Publish Price: Price information is useless unless cost is calculated for identical services. Agreement is needed on what procedures and services are covered in each "episode of care."
  4. Create Positive Incentives: All parties -- providers, patients, insurance plans, and payers -- should participate in arrangements that reward both those who offer and those who purchase high-quality, competitively-priced health care.

In order to help lay these cornerstones, the Administration is asking private employers to commit to supporting certain actions and encouraging their health insurance plans, third-party administrators, providers, and others to do the same. These actions are:

  • supporting health information technology by requesting health information technology vendors to use systems and products that meet HHS-recognized interoperability standards when implementing, acquiring, or upgrading health IT systems and products;
  • providing quality information by implementing programs to measure healthcare provider quality and disseminate this information to plan participants;
  • providing pricing information by implementing programs to make information available to participants about the overall cost or price of their health care; and
  • promoting quality and efficiency of care by working to develop approaches -- such as reimbursing providers on a pay-for-performance basis or offering consumer-directed health plan products -- that encourage and facilitate high-quality and cost-effective health care.

Additional details are available on HHS's Value-Driven Health Care Web site, at www.hhs.gov/transperancy. Among other things, the Web site includes a statement of support for these Four Cornerstones the Administration is encouraging employers to sign. Secretary Leavitt is hoping at least 100 companies will sign the statement of support by the end of 2006.


Deloitte logoThe information in this Washington Bulletin is general in nature only and not intended to provide advice or guidance for specific situations.

If you have any questions or need additional information about articles appearing in this or previous versions of Washington Bulletin, please contact: Robert Davis 202.879.3094, Elizabeth Drigotas 202.879.4985, Taina Edlund 202.879.4956, Laura Edwards 202.879.4981, Mike Haberman 202.879.4963, Stephen LaGarde 202.879-5608, Bart Massey 202.220.2104, Laura Morrison 202.879.5653, Martha Priddy Patterson 202.879.5634, Tom Pevarnik 202.879.5314, Carlisle Toppin 202.220.2067, Tom Veal 312.946.2595, Deborah Walker 202.879.4955.

Copyright 2006, Deloitte.


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