Shifting Climate

New Technologies Altering How We Get Care

Among the Innovations, Patient Centered Care

New Jersey Is Changing, But The System Still Needs Work

Patient Centered Care Works for Consumers, Doctors, and Providers

Patient Centered Care in New Jersey and Around the Country

Where Do We Go From Here?


The Health Care Landscape In New Jersey Is Changing

New Jerseyans continue to struggle every day with the cost of rising health care. Their premium and out-of-pocket costs go up, but they do not feel they are receiving better quality of care. More tests and procedures are done, more bills are sent, but better outcomes are not created. This is despite the fact that hospitals are consolidating and forming new partnerships, technology and data are altering how care is delivered, and new procedures are being introduced as the next great breakthrough. High-tech sensors will provide at-home monitoring of patients’ hearts, while new technologies will allow for full body scans that can check for a variety of symptoms without actually poking or intruding patients, all in a matter of seconds. [1] As we look to the future, it is important that technological advances and innovations in health care benefit all those involved: patients, professionals and providers. Consumers need a system that provides better care at a lower cost. Doctors need more quality time with patients. Providers need a system that rewards outcomes over procedures.

Research gathered by BCBCNJ shows that consumers think “Doctors move you along a lot quicker now because they have to see more patients – you lose that individualized feeling.” [2] This realization is also noted not only from consumers, but from their physicians. In fact, a Stanford trained doctor explained this phenomenon to NewsWorks: “You’re processing 30 patients a day and trying to get through without hurting anybody or committing malpractice and then doing your documentation in an electronic health record that’s literally a series of click boxes designed by a beancounter who’s never touched a patient.” [3]

Further research has consistently provided evidence of the strain on all parties involved: consumers, professionals, and providers. A nationwide study commissioned in 2014 suggests that “tens of thousands of doctors have moved from small private practices with minimal bureaucracy into giant group practices where bureaucracy is rampant. Under the accountable care organizations favored by insurers, more doctors are facing HMO-type incentives to deny care to their patients, a move that our data shows drives up administrative work.” [4]

To understand how we can harness the changing health care landscape to create the best outcomes possible for New Jersey, we have to understand how we got here.

Shifting Climate

The nation headed into the 21st Century facing a multitude of problems on health care. In 2002 the New York Times noted that, “Employers are bracing for their third year in a row of double-digit increases in health care costs… Companies will probably face average increases of 12 to 15 percent in 2004, compared with a projected increase of 12.7 percent this year.” [5] In addition, rising health care costs have been cited as a factor in the slow job growth that occurred during the first decade of this century. 129 million Americans, which is nearly one in two people, could be denied health care coverage because of pre-existing conditions. In addition, health care companies could decide what classified as a pre-existing condition, allowing them to consider health problems such as heart disease, diabetes, acne and even bunions as pre-existing conditions. [6] One insurer refused to issue policies to police officers and fire fighters because of their hazardous occupations. Some insurance companies treated pregnancy or the intention to get pregnant as a reason for rejection. [7]

Facts and Figures

Various changes in health care policy combined with advances in technology and outside-the-box thinking dramatically changed the landscape over the last five years. Health insurance providers were no longer able to require higher copayments or co-insurance for out-of-network emergency room services or require an individual to seek approval before emergency room services from a provider or hospital outside their plan’s network.

The rising rate of health care costs slowed considerably. [8] The Altarum Institute has reported that such costs rose by 1.1 percent in 2015 — the lowest annual rate increase since the Institute began tracking in 1990. [9]


New Technologies Altering How We Get Care

As the health care industry started to evolve and changes took shape, it was met with rapidly advancing technologies in how people received and kept track of their own health.  As noted by Hospitals and Health Networks Magazine:

“The scope of these emerging technologies is breathtaking. High-tech sensors soon will monitor the at-home cardiac patient’s heart every minute of every day. A new type of chip, embedded in a pill will be activated at the precise moment it reaches a patient’s stomach, and will confirm for the medical record that he’s taking his medications. Straight out of science fiction, new gizmos will emerge that can scan a body for a host of symptoms without poking or prodding and, in seconds, they’ll make a diagnosis.” [10]

In addition, patients have greater access to health data, as explained here by Avalere Health Senior Vice President Josh Seidman:

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Among The Innovations, Patient Centered Care

One of the most significant changes was the creation of the Hospital Value-Based Purchasing Program and the Hospital Readmission Reduction Program. [11] These programs award acute care hospitals with incentive payment for care they provide to Medicare patients. [12] In turn, the Centers for Medicare & Medicaid Services changed the way they pay health systems. Instead of utilizing the fee-for-service model, CMS now uses funds to pay health care providers based on the quality of care they provide. [13]

Over the last five years, the U.S. government and employer groups have been pushing health care systems to shift to patient centered (also known as value based) care. The reasoning is that patient centered care will improve outcomes, lower costs and increase overall access to care. The push for patient centered care is based off the belief that when hospitals eliminate waste, improve quality and reduce costs, they will attract increased patient volume.  The switch to patient centered reimbursement has created systematic change, causing providers to alter the way they bill for care. Instead of providers being paid for the test they order or the number of visits, their payment is now dependent of the value of care they deliver. [14]

Dr. Michael Chernew, of Harvard Medical School, has written about the benefits of patient centered care. Dr. Michael Chernew writes, “Unlike most current health plan designs, Value-Based Insurance Design (VBID) explicitly acknowledges and responds to patient heterogeneity. It encourages the use of services when the clinical benefits exceed the cost and likewise discourages the use of services when the benefits do not justify the cost.” [15]

The views expressed by Dr. Chernew are shared by others in the field. Dr. Jeff Rideout, the exchange’s senior medical adviser, concedes that many individual plans have networks that include fewer providers than non-ACA plans offered by the same insurers. But, he says, there is more upside than just lower prices. “Better value occurs when there’s better alignment between a plan and a relatively tight network,” says Rideout. In other words, when insurers and providers are more dependent on each other, there’s more motivation to deliver efficient care. [16]

The Harvard Business Review called patient centered care, “The strategy that will fix health care.” [17] They noted that, “At [value base health care’s] core is maximizing value for patients: that is, achieving the best outcomes at the lowest cost…We must shift the focus from the volume and profitability of services provided—physician visits, hospitalizations, procedures and tests—to the patient outcomes achieved. And we must replace today’s fragmented system, in which every local provider offers a full range of services, with a system in which services for particular medical conditions are concentrated in health-delivery organizations and in the right locations to deliver high-value care.” [18]

The American College of Physicians issued a report in 2016 that recommended moving towards a patient centered health care system that promotes “team-based care that emphasizes prevention as well as cooperation and coordination among physicians, hospitals, and other health care professionals.”  Their full report is available here:  The University of Michigan has established a Center For Value-Based Insurance Design that highlights how patient centered care can create real, positive change:  In addition, you can learn more about how patient centered care is changing how health care is delivered at:

New Jersey Is Changing, But The System Still Needs Work

There are several reasons why New Jersey health care costs are so high.  New Jersey currently operates under a “fee-for-service” system.  Under this kind of system, good doctors are forced to see as many patients as possible in order to make up for declining reimbursement from health insurers.  This means doctors are paid based on how many patients they see, not on keeping patients healthy.  New Jersey has some of the greatest doctors in the world.  However, the system as is simply does not allow doctors to spend quality time determining how best to keep patients healthy.

Surprise doctor bills are becoming a common occurrence that can have potentially hazardous effects for many consumers. Surprise billing is the phenomena in which a patient seeking medical care under their insurance plan is billed an exorbitant amount of money because the care they received was performed out of network. [19] Surprise bills arise when what an insurer pays a provider doesn’t match up with what a doctor, physicians’ group, or out-of-network hospital actually charges. [20]

Normally, patients should have protections against surprise bills, but if patients seek care out-of-network, these protections do not apply. In-network providers have signed contracts with insurance companies that prohibit them from collecting anything from the patient beyond what the patient owes based on the plan’s deductibles, coinsurance, or copays. [21]

However, out-of-network doctors can bill as much as they want. Even if the health plan pays a portion of the bill, the patient may be stuck paying the out-of-network cost sharing obligation and any amount that is over and above the plan’s “allowed amount.” [22]


The story of John Elfrank-Dana provides a cautionary tale of what can happen with surprise billing. Elfrank-Dana was treated for multiple brain surgeries, only to find out after treatment that his insurance did not cover the costs. [23] “My insurance had made payments to the hospital and anesthesiologist but it was a fraction of what they were asking… So they started going after me for the balance,” said Elfrank-Dana. [24]

Patient centered care can fix this in New Jersey. As noted in the PCPCC study, patient center care can reduce unnecessary hospital visits and procedures. This mean doctors can spend more time with fewer patients, in turn allowing patients to work with their doctors and determine how best to stay healthy.

Patient Centered Care Works for Consumers, Doctors, and Providers

An Aetna article found that: [25]

  • “In value-based models, doctors and hospitals are paid for helping keep people healthy and for improving the health of those who have chronic conditions in an evidence-based, cost-effective way.”
  • “Accountable care organizations are transforming care delivery by paying health systems and doctors based on their success at improving overall quality, cost, and patient satisfaction with their health care experience.”

United Health Care suggests: [26]

  • “The most important thing to know about value-based care is that it puts the patient at the center of the health care experience.”
  • “Consumers build strong connections with their physicians, find it easier to access care and have more information at their fingertips.”
  • “More transparent information makes it easier to reach and compare quality, cost and provider-specific information.”

According to Harvard Business Review:

  • “[The] move to full transparency has helped doctors and administrators come together around their shared purpose: improving outcomes, patient trust, and market share in a competitive environment.” [27]
  • “The providers who make the transition early will be rewarded with more satisfied patients, lower expenses, and pride in a job well done.” [28]

At the Cleveland Clinic in Ohio, they have been using patient centered care to tremendous success, “Through a concerted focus on our supply chain, we use rigorous value-based purchasing protocols, market intelligence, and business analytics to examine every purchase from the standpoint of value, utility, and outcomes. Over the past two years, this has resulted in cost savings of more than $150 million.” [29]

In 2013, 10.9 percent of all commercial in-network payments, and 11 percent of outpatient PCP payments were either tied to performance or designed to cut waste. One year later, those percentages had risen to 40 percent and 24 percent respectively. [30]

The National Council of Quality Assurance tracked 139 hospitals that switched to patient centered care. Of those 139, nearly half saw performance improvements, while only eight percent saw a performance decline. [31]

Dartmouth-Hitchcock Medical Center in New Hampshire has been utilizing patient centered care, and their, “readmission rates are in the lowest 1 percent in the nation for chronic heart failure, and at the top 5 percent for effectiveness and efficiency.” [32]

Earlier this year, the Patient-Centered Primary Care Collaborative (PCPCC) issued an update to their impact of patient-centered medical homes on healthcare costs and quality study.  The results showed:

  • Reduced emergency department visits
  • Reduced inpatient hospitalizations
  • Reduced hospital readmissions
  • Reduced drug spending [33]

The Patient-Centered Medical Home’s Impact on Cost and Quality

Tying Costs to Results

A 2015 study released by Avalere Health indicates that a majority of health plans are interested in forming outcomes-based contracts with biopharmaceutical manufacturers that tie product reimbursement to patient outcomes.” [34] This survey shows a growing desire and acceptance of the concept of patient centered care.

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Patient Centered Care in New Jersey and Around the Country

New Jersey is not the only state in the country moving towards patient centered care; Massachusetts, North Carolina, Pennsylvania, Delaware and California all have some sort of tiered hospital network in place through insurance providers that encourages patient centered care.

Recent laws created incentive programs for large consolidated health groups. These incentives pushed hospital groups into mergers and insurers into catering to patient centered care. In order to do so, health care insurance companies created tiered networks that have the potential to appeal to a larger consumer audience. [35] Instead of insurance companies making annual choices of which providers can be accessed in network, tiered networks allow this decision on a point-of-service basis. [36] In a tiered network, patients pay less in cost sharing when they use preferred providers. [37]

Graphic 6


Dr. Stefan Larsson, the global leader of  Boston Consulting Group’s health care payers and providers sector, explains why patient centered care works.

Where Do We Go From Here?

As the health care landscape continues to change, it is important that we adjust with those changes.  So where do we go from here and how do we proceed?  The Health Care Transformation Task Force, a consortium of patients, payers, providers and purchasers working to transform the U.S. health care delivery system, has released a new framework that systems can use to ensure consumers’ priorities remain front and center during all phases of the transformation to a patient centered care system.

But it is not just about patient centered care. The ever changing landscape means we must be vigilant in finding, developing, and implementing the latest in health care innovations. Do you have information or ideas on how to make health care work better for providers, consumers, doctors? Share with us.


[2] Consumer comment to BCBCNJ