March 2015 | Total Cost of Care
Tuesday, March 24, 2015
Total Cost of Care

The total cost of care is the full cost paid by both patients and health insurance companies. The amounts have been risk-adjusted and outlier costs have been removed to create a level playing field for all medical groups so true differences in cost can be evaluated. Total Cost of Care is a National Quality Forum (NQF)-endorsed methodology, which includes all costs associated with treating commercially-insured patients, including professional, facility inpatient and outpatient, pharmacy, lab, radiology, behavioral health and ancillary costs. NQF is considered the gold standard of health care measurement.

Minnesota Releases Nation’s First Total Cost of Care Data for Medical Groups

A new report published by MN Community Measurement allows consumers, for the first time, to compare the total cost of care at medical groups across the state. Costs from more than 1.5 million patients were included in the report, which is the nation’s most comprehensive look at the total cost of care. Information is available for 115 medical groups, representing 1,052 clinics across Minnesota, on

The average monthly cost of medical care per patient is $435 in Minnesota and just a small reduction could save millions. A reduction in the average per patient cost of just $12 per month, or $144 per year, would save Minnesotans $750 million in health care costs annually.

“Total cost of care is a major problem in our society, not just for health care,” said Dr. David Satin, family medicine physician with University of Minnesota Physicians. “There’s a wide swath of things we can do today to improve the total cost of care – in particular beginning to discuss and eliminate unwarranted variation in care.”

Oregon: Improving Transparency in Health Care Costs

Oregon Health Care Quality Corporation (Q Corp), leader of the Aligning Forces for Quality initiative in Oregon, is at the forefront of improving transparency in the costs of care. Their goal is to analyze data about the costs of care to help identify methods for reducing costs and unnecessary care. 

Q Corp was chosen by the Network for Regional Healthcare Improvement (NRHI) as one of five communities to develop total cost of care and total resource use reports through the Healthcare Cost Measurement and Transparency project. The project seeks to break new ground in cost transparency by producing health care cost information and benchmarks. This information will allow communities to better understand health care cost variation across their own regions and provider groups, and also make cost comparisons to other regions across the country. The five different communities have to “make sure they’re comparing apples to apples in terms of cost,” said Meredith Roberts Tomasi, program director with Q Corp. It’s a formidable task to ensure that the cost information being compared aligns. For Q Corp, this can mean using cost data around four diagnosis codes used in Oregon for a particular illness, rather than the 10 diagnosis codes used for the same illness elsewhere in the country.

Introducing: The Network for Regional Healthcare Improvement

The Network for Regional Healthcare Improvement (NRHI) is a national membership organization representing over thirty Regional Health Improvement Collaboratives (RHICs). These multi-stakeholder organizations are working in their regions and collaborating across regions to transform the healthcare delivery system and achieve the Triple Aim: improving the patient experience of care, including quality and satisfaction; improving the health of populations; and reducing the per-capita cost of healthcare.

NRHI’s members are committed to making credible, reliable information about healthcare quality and cost transparency available to everyone. In communities across the U.S., RHICs have developed and supported meaningful public reporting initiatives. Several Aligning Forces for Quality Alliances are NHRI members, including:

  • Maine Health Management Coalition
  • Oregon Health Quality Corporation
  • Massachusetts Health Quality Partners (MHQP)
  • Minnesota Community Measurement (MNCM)
Aligning Forces for Quality (AF4Q) is the Robert Wood Johnson Foundation’s (RWJF) signature effort to lift the overall quality of health care in targeted communities, reduce racial and ethnic disparities in health care and provide models for national reform. Alliance teams represent the people who get care, give care, and pay for care.
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