When it comes to providing efficient, quality health care, Wisconsin has proven itself to be a national leader. It consistently ranks among the top states in the nation in terms of the quality of medical care provided and outpaces the nation in terms of inpatient quality.
The Association for Healthcare Research and Quality (AHRQ) annually ranks states on the quality of care delivered based on 171 measures. Since 2008, the state has consistently been ranked as one of the five best states in terms of quality. In 2015, it was ranked second, behind only New Hampshire.
HCTrends monitors health care performance for 18 inpatient quality measures using data collected by the Centers for Medicare and Medicaid Services. The most current CMS data shows that Wisconsin outperforms the national average in outcomes, process measures and patient satisfaction and has an aggregate quality score that is 3 percent above the national average.
The state’s health care providers have proven themselves to be efficient as well. A recent study of 41 metropolitan areas conducted by the Health Care Cost Institute found that the two Wisconsin cities included in the study – Milwaukee and Green Bay – were in the top quartile of cities in terms of cost-efficiency. Green Bay’s per-person utilization of hospital health care services was the second-lowest of the urban areas analyzed; Milwaukee was the ninth lowest. The state also outperforms the national average in terms of Medicare spending per beneficiary, based on data collected by the federal government. In 2014, Wisconsin’s Medicare spending per beneficiary was 4 percent lower than the national average. Low utilization and low spending are not necessarily good in and of themselves; however, when combined with the state’s high quality rankings, they are a strong indication of cost-efficiency.
Several factors are responsible for the state’s leadership role. One is the proactive efforts of provider and payer organizations to promote and improve benchmarks for quality and efficiency. These initiatives include:
· The Wisconsin Hospital Association’s extensive quality initiatives, including Partners for Patients and its CheckPoint website (wicheckpoint.org)
· The Wisconsin Collaborative for Healthcare Quality (WCHQ), a multi-stakeholder consortium of health systems, medical groups, clinics, and hospitals that measures the quality and affordability of healthcare services in Wisconsin
· The Wisconsin Health Information Organization, a voluntary effort by the majority of the state’s insurers to create one of the only publicly accessible all-payer claims databases in the country
Another factor is the state’s insurance market, which is the most competitive in the nation. The state is served by more than 200 health insurers, none of whom have more than 25 percent of the market. In most other states, a single insurer has more than 50 percent of the market share. Among the 50 states, Milwaukee has the most competitive large group and small group insurance market in the country based on its Herfindahl-Hirschman Index (HHI), a recognized measure of competitiveness. This is significant because studies of federal health insurance exchanges, which are required to have similar plan designs, show that premiums tend to be lower in more competitive markets.
Also notable are the number of integrated health care delivery systems in the state. The Affordable Care Act’s Medicare reforms may have prompted the formation of accountable care organizations nationally, but Wisconsin providers have been perfecting integrated care delivery models for decades. Several of these models include provider-owned insurance plans, which drive efficiency by fully aligning financial incentives.
Integrated care developed and implemented within an integrated delivery system is generally more effective than care management strategies developed and imposed on providers by third-party payers. There are two principal reasons: the clinical buy-in of providers and single-source accountability. Providers are more willing to embrace treatment protocols that have been developed by their colleagues than protocols developed by a third-party vendor. With single-source responsibility, there is no external finger pointing that would delay the resolution of issues.
An HCTrends analysis of the state’s largest most completely integrated health systems – Aurora Health Care, Dean/SSM, ThedaCare and UW – found that these health systems are four percent more efficient in the utilization of health care resources than other providers. All four systems also outperformed the state average in both medical and hospital quality.
Another study suggests that provider-owned health plans have lower premiums than plans with no provider affiliation. The analysis evaluated the 17 plans in the Wisconsin State Employee Health Plan, one of the longest-running health insurance exchanges in the country. It compared the quality and premiums of the four health plans serving Dane County (Madison) with the health plans serving other areas of the state. The analysis noted that provider-owned plans serving Dane County had both the highest average quality rating of all the plans in the exchange as well as the lowest premiums. The authors concluded that key reasons for the lower premiums were the integrated plan’s higher quality ratings and “the unique structure of competition among integrated delivery systems only.”
In its ranking of clinical quality for more than 1,300 health insurers nationally, the National Committee for Quality Assurance found that Wisconsin was among the states with the highest percentage of high-quality plans, with seven provider-owned plans achieving a quality of rating of 4.5 or 5.0 on a 5.0 scale.
The Wisconsin Advantage
These findings suggest that integrated delivery systems and a competitive insurance market have promoted a health care culture that improves quality and efficiency. An HCTrends’ analysis of financial documents from 21 health plans doing business in the state found that administrative costs averaged 9.6 percent of revenue, which was about 14 percent less than a national benchmark. Wisconsin health plans also had relatively low margins (profits) equaling 1 to 3 percent of revenue.
Integrated delivery systems and a competitive insurance market, combined with a coalition of providers, payers and business leaders has created a culture that has put the state ahead of others in both quality and efficiency improvement. The prevalence of integrated delivery systems, the WHIO efficiency initiative, the WCHQ and WHA quality initiatives and the state’s highly competitive insurance market are each unique in and of themselves. Put together they represent an effort that is unrivalled in the country.