Work begins to trim health care costs in Minnesota

An experiment
Patient Crystal Miller likes that she can see her doctor as often as she needs to during her pregnancy without adding additional cost to her bill. Her obstetrician, Eric English, says pregnancies are relatively easy to price because the condition has a beginning, middle and an end.
MPR Photo/Lorna Benson

To understand a basket of care, think about grocery shopping. Let's say you want to make your favorite lasagna for dinner. When you go to the store to buy ingredients, you probably compare the prices of the noodles and sauces. Or maybe you pick your ingredients based on what you've read on the label about their quality. The point is you go through the checkout lane with a pretty good idea of what you're buying.

The concept is the same behind baskets of care.

"It's making visible something that hasn't been visible before and engaging consumers in thinking about care," says Sanne Magnan, the state health commissioner.

Let's say instead of lasagna ingredients, you're shopping for a hip replacement. If you buy a basket of care, Magnan says, you will see all of the services your doctor offers ahead time, as well as the physician's success rate and the total cost of the procedure from office visits to hospitalization to rehabilitation. Armed with that information, you can then comparison shop for your hip replacement among doctors who are competing for your business.

To a lesser extent, this type of package deal is already quite common in obstetrics.

In a Maplewood doctor's office, Crystal Miller is undergoing an exam. This is her first baby and she has about 10 weeks left in her pregnancy. Miller likes the prenatal care arrangement she has with her doctor.

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Pricing care
Obstetricians often have a good sense of what it might cost to care for a pregnant patient. Some other physicians say it's not so easy to figure out package deals for their specialties.
MPR Photo/Lorna Benson

"Actually I really just started looking into it more lately as far as what I'm going to be paying. I kind of went into it late in the game. But I think it's good to have it all in one lump sum. That way you know exactly what you're going to pay upfront."

Bundling pregnancy care into packages is good for patients and it's relatively easy for obstetricians to do, according to Dr. Eric English, Miller's physician.

"Closed-end disease conditions such as pregnancy where there's a beginning, middle and an end, where the numbers are relatively known in terms of complication rates, really lend to this kind of packaging."

Infertility specialists also offer similar types of bundled services to their patients.

But for other doctors, it's not appealing.

"It's just too much risk for me to consider," says Dr. Michael Tedford, an ear, nose and throat doctor who has a small practice in Edina.

Besides Tedford, there are just one other doctor, two nurse practitioners and an audiologist. He's worried that baskets of care will hurt his clinic financially because it's not big enough to absorb the cost of patients who have unexpected complications. He wouldn't feel confident in his ability to predict these surprise costs and factor them in to his pricing.

Better care
Prenatal care is an example of how Baskets of Care could look for other conditions. Many obstetricians offer prenatal packages that include office visits and delivery charges for one set fee.
MPR Photo/Lorna Benson

"It would be very hard for me to sign on to delivering a basket of care since I know from past experience that docs are bad at that. Docs are bad at assessing risk and knowing what's going to be a good business decision in the face of trying to do the right thing for the patient," he says.

In a way the health care system has already experimented with concepts similar to baskets of care and the experiments didn't work, Tedford says. Health Maintenance Organizations took on the financial risk of patients and when the costs got too high, some HMOs wrongly restricted services to save money, he says. He points out another experiment that limited physician payments also failed.

Dr. George Schoephoerster agrees that previous attempts to control health care costs have not succeeded. But as a member of the Health Care Reform Review Council, Schoephoerster says the state needs to keep experimenting.

"I think of this as one example of trying to do things differently. And it may be that we learn that this isn't the best way to do it and there may be others. And I think this is just one of the new ideas that are going to be supported allowing the health care system to look at new ways of doing things."

For now the baskets of care model is voluntary. But reformers are hoping that enough physicians will adopt the model, that other doctors will feel the pressure to compete on price too.