The Value Chart

The first section of The Doctor Shopper contains the Value Chart, which is our prime means for conveying value. This chart contains no new information, but it organizes in a particularly useful way information that is contained in the Prices and Performance sections below. Specifically, it is a graphical representation of how doctors compare with each other with respect to both price and performance. In the chart shown below, the name beside each box refers to a doctor listed in The Doctor Shopper, and the number 1 or 2 in parentheses to the right of each doctor's name refers to a hospital with which that doctor is affiliated. The actual names of the hospitals are shown on the reverse side of The Doctor Shopper. For example, hospital 1 for Dr. Saenz is University Hospital, while hospital 2 is Metropolitan Hospital.

The chart itself pertains specifically to the patient's diagnosis (inguinal hernia repair) and to her prognosis rating (PR=8), which indicates a relatively optimistic prognosis. Prices are measured on the left axis of the chart, and the Outcomes Index on the horizontal axis. Each doctor is plotted on the chart with respect to price, Outcomes Index and hospital affiliation. Lower prices are toward the bottom of the chart and better outcomes toward the right. The benefit amount for the current phase of the member's treatment is depicted by the horizontal blue line. It is a fixed amount. Selecting a doctor from above this line will cost the patient extra; selecting a doctor from below the line will earn her a rebate.

The price is net of any bundled price, discounts and includes any hospitalization costs. We report those outcomes associated with each doctor's preferred method for treating the patient. (Recall that the treating doctor may deviate from the treatment plan prepared by the Diagnostician if the patient accepts the bundled price option.)

Now, let us define the Best-Value Boundary. It is the red boundary line formed by connecting the solid boxes representing the "best" doctors. These doctors are best in the sense that no other doctor shown on the chart reports better outcomes at a lower price. It is called "the Best-Value Boundary" because for doctors off the Boundary, there is always at least one doctor on the Boundary who is both cheaper and better.

Over time, the Best-Value Boundary will tend to shift toward the "southeast". This shift will occur whenever a doctor adopts a new technology, a new medical procedure or a new pharmaceutical that enables him to produce a better outcome at a cost less than that of any other doctor on the chart. It is easy to identify the doctors who are on the Best-Value Boundary—the boundary line connects their solid boxes. In the example, Drs. Clark, Williams, Lee, Saenz and Smith are all on the Best-Value Boundary. In fact, Drs. Clark and Saenz happen to be on it twice—once for each hospital with which they are affiliated.

Some hospitals are better than others, but it is the doctor who chooses the hospital and who also may selects the key members of his support team. Therefore, the doctor who admits the patient receives the total credit for the patient's outcome. We have not, however, let the hospital off the hook. If a hospital does not provide the doctor with a sterile environment, adequate equipment, and a skilled support staff, the doctor's Outcomes Index will suffer. It is expected that in such cases the doctor will pressure the hospital to improve, or he is likely to treat his patients at a hospital that is more responsive to his requirements. The hospital's costs also enter into the equation, and a doctor is less likely to admit his patients to a morrece expensive hospital that does not sufficiently add to the recovery of his patients.

In the chart, we see that Dr. Lee enjoys better outcomes at the less costly hospital 1, and he will likely steer his patients there. Hospital 2 is therefore at a competitive disadvantage, and it will either have to lower its costs or contribute more to the recovery of Dr. Lee's patients if it wishes to obtain more of Dr. Lee's business.

The Best-Value Boundary shown in this chart is a "neighborhood Boundary" because it pertains only to those doctors with offices in the neighborhood of the patient's residence or place of work. We can also produce a chart with a "community Boundary," which is based on all of the doctors within the local healthcare market who offer the treatment needed by the patient.

The Value Chart provides an effective way to represent value to the patient. It tells the patient the cost of quality by showing how many dollars she must give up to purchase the expectation of a higher level of performance. Unlike most other plans, we leave it to the patient to make the choice between price and performance. This choice should belong to the patient, and not to the government, or to the patient's insurance plan, or even to the patient's doctor.

By now, it may have occurred to you that patients might like to have a version of The Doctor Shopper that lists only those doctors who are positioned on the community Boundary. RE·MEDI can offer the patient both this version of The Doctor Shopper as well as the version based on location convenience (the neighborhood version). However, within a large urban area, there may be too many eligible doctors to include. To keep the information manageable, the patient could limit the price or performance range for which she would like to receive the information. Other selection criteria can be applied as well.