Cost-Per-Episode vs. Unit Price
Too many health care purchasers focus on unit price, seeking to save money with the lowest cost provider for X-rays, office visits or surgical procedures. These initial “savings” are deceiving because they don’t take into account the most significant piece of the health care cost equation – how health care services are utilized. Low unit-price providers can actually increase employer costs if they order unnecessary tests or provide inefficient care that delays healing or causes a relapse.
The Aurora Accountable Care Network (AACN) is based on a different philosophy – a results-oriented, patient-centered focus that rewards providers for what they accomplish instead of what they do. Our cost-per-episode approach targets both unit cost and utilization. Using sophisticated software, we group all of the physician, hospital, lab, pharmacy and other medical claims for each diagnosis to calculate the entire cost of treatment from the moment of diagnosis until the patient’s return to health. We also monitor relapses and costly hospital readmissions to ensure that the treatment provided is a long-term solution and not a short-term fix.
