2008 Annual Report
What's on your mind?

Group Health is working to reduce costs. But how is it possible to do that without affecting quality?

James Hereford James Hereford: It isn't an either/or question. People think they can have high quality or low cost, but not both. That's because many people typically think of health care as episodic or as individual events rather than an ongoing engagement. They tend to equate high quality with going to a prestigious hospital or getting treatment that uses fancy technology.

Turns out those things have little to do with the actual quality of the care people receive. The better you deliver quality health care over time, the lower the costs are over time. It's been proven in multiple ways. Yet most traditional health plans don't invest to improve quality and health because it doesn't really support their business model. They don't think about keeping their enrollees healthy over the long haul. Their focus is on selecting risk and attracting customers who don't need a lot of care. But because Group Health integrates care and coverage, we make longer term investments to help our members become healthier and stay healthier over time.

Scott Armstrong Scott Armstrong: Our business model allows us to use financial incentives to help coordinate and deliver care when and where it makes the most sense for the patient.

Take sleep apnea, for example. With sleep apnea, you actually stop breathing, repeatedly, while sleeping. It causes all kinds of health problems for the people who suffer from it. Typical insurance companies reimburse fee-for-service doctors by requiring that patients spend the night in an expensive "sleep lab" where they are monitored by a lot of high-cost equipment and staff. If you don't study patients in these settings, the insurance companies won't reimburse you. And these inpatient studies usually cost about $4,500.

Now consider Group Health's approach to the same condition. We typically provide our patients with monitors to take home. They get to sleep comfortably in their own beds as they normally would, we get virtually the same data that other doctors collect in their expensive inpatient facilities, and our cost is around $350. That's because our doctors don't have to worry about getting reimbursed. We can do what's best for our patients because we integrate our coverage with our health care. Yet, in most of the country, the question would be: Home monitoring? How do doctors get reimbursed for that? For us it doesn't matter. If it speeds diagnosis and treatment and keeps people healthy, it lowers our overall cost. That's a win for everyone.

The evidence is clear that high-cost procedures do not necessarily lead to better outcomes. And getting more clinical services doesn't mean better quality. Being proactive and providing early preventive care to keep people well — that's better quality. Getting the right care on your first visit to your doctor — that's better quality.

Bob O'Brien Bob O'Brien: We encourage customers to pay attention to how all health care systems deliver quality. One resource worth checking out is the Web site maintained by the Puget Sound Health Alliance, an independent group dedicated to measuring and giving the public access to a set of quality results in this region. Go there to see our performance alongside 45 other systems and 170 large clinics. Group Health received "above regional average" in 9 of 15 care measures.