In the United States, loss prevention trends in health care have seemed very loudly directed at health care fraud, and less so about waste and abuse. This may be for many reasons: if you’re a private carrier, fraud prevention allows for larger recoveries and greater avoidance of future lost revenues. Pursuing abuse and waste is usually a much more drawn out process that can sometimes take years to implement and see results, and may only produce a small percentage of cost savings.
In the government health care space, the focus is on prosecuting, which officials hope will translate into greater deterrence. And clearly, it is much more difficult or impossible to prosecute for abuse or waste, respectively.
In Europe it appears to be a different story. For one reason, there is a great deal of contracting with hospitals, but also because the regulations greatly limit the ability to pursue providers and share information, though this obviously varies by country. Europe is also very different because most countries in Europe have very large public health care systems that include public hospitals. For whatever reason, Europe has responded to concepts around policy modification and contract negotiation.
Many private European insurers are interested in defining best practices for hospitals and doctors that then allow them to define much better service agreements (beyond fee-schedules), making it possible for the insurers to see immediate gains with no reduction in provided services. In some cases, the cost savings even go hand-in-hand with an improvement of services, especially where not enough services were being provided (this is usually the exception – but it is always nice to improve patient care and reduce costs at the same time).
A simple example came up around pregnancy stay : at one hospital the average stay for non-cesarean deliveries was three days, at another it was six. In some cases it was even the same doctor at both hospitals. By identifying this "event," it makes it possible to make a clear case for change, and adjust policy.
Now this is far from a new idea; however, very seldom have I seen any analytical empirical system contributing to the contracting process. What I have seen many times in the past is a policy offer to a large employer group where the competitor contract is simply copied, or whatever the previous contract was is reused with some small, manual adjustment. But which elements of the contract are the most effective?
It raises the question: How are health care policies and contracts empirically measured? Are contracts or their respective sub-parts measured over time? How are contracts and policies analyzed across a book of business to determine which are most profitable (for an insurer) or desirable (by an employer group)?