The future of healthcare - Provider relationships


5 July 2017

"We want to work with doctors who follow best practice and use efficient pathways of care. Rewarding outcomes, satisfaction and efficiency will be part of the future..."

Dr Annabel Bentley, Deputy Chief Medical Officer, AXA Health

With a change in the relationship with treatment providers we know we can reduce the number of interventions by changing the way we contract with them and aligning everyone’s incentives.

Medicine is constantly changing especially now at a time where change is elevated by technological advancements and big data. Both help inform how we go about treatment as well as deciding what treatment is needed - positives with side effects. However, rapid change increases the risk of receiving disparate viewpoints on care and treatment. For example, in the 50s it was common for children to have their tonsils removed, with around 200,000 tonsillectomies taking place every year. By 2010/11 this had reduced to around 29,000 a year1. However, the debate is ongoing and there is evidence that the practice could be beneficial.

That said over-diagnosis and over-treatment is a problem. We need to work differently – to deliver better care, rather than just more choice.

At the moment, we pay a fee-for-service model, where the more consultations, scans and treatments specialists do, the more they get paid. Not only are there incentives to intervene, but the increasing number of providers creates diminishing economies of scale.

One solution may be ‘outcome-based contracting’, where the health of a population is entrusted to a much smaller cluster of providers. This would mirror the population-based approach being favoured by the NHS. Based on a known population, demand becomes more predictable, and risk more calculable so providers can be selected to manage the whole healthcare pathway. Instead of charges levied for every intervention, remuneration would be linked to outcomes in the health of that population.

At the same time, the true cost of healthcare is hidden from the patient, meaning there’s no incentive for them to consider cost at all when they’re making decisions about their treatment. Many people would be perfectly happy paying any price to see a doctor of their choice, even if they were paying themselves. But how would they feel if they knew that doctor’s MRI scan was three times the price of an identical scan from another provider?


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1 - Source: Daily Mail – 17/09/2012: