From 3M Health Information Systems
The Iron Triangle of Health Care: Access, cost and quality
The “Iron Triangle” in health care refers to the concept that access, cost and quality cannot all be simultaneously improved. The premise is that an improvement in one area results in a decline in at least one of the others. While this is typically true when the current methods of healthcare delivery and finance are simply expanded, there is a role that disruption and efficiency can play in achieving a multi-faceted positive outcome.
The Iron Triangle of Health Care was first introduced by William Kissick in 1994 in his book, Medicine’s Dilemmas: Infinite Needs Versus Finite Resources. The context within which Kissick posited this theory came on the heels of a failed attempt by the Clinton Administration in getting Congress to consider the Health Security Act of 1993. The primary objective was to decrease costs while increasing access. This was the original goal of the Affordable Care Act in 2009, as well. Obamacare succeeded in increasing access, but did not reduce costs, which would seem to give credence to Kissick’s argument.
However, disruption can change the rules by which health care is delivered or accessed, and thereby create an opportunity for simultaneous improvements in cost, quality and access. Disruption typically occurs at the macro-level when a payer changes the way that services are reimbursed, such as when greater risk is transferred to a provider. This can happen with a move to bundled payments, downside shared savings arrangements, or capitation. This type of disruption can reduce cost by eliminating unnecessary services, while having minimal impact on quality or access.
Disruption can also occur from the bottom up, such as when new technology changes the way consumers access health care. The use of retail clinics, telehealth, and online access to physician consultations, medications, and supplies are examples of this type of disruption in health care.
By its very nature, disruption renders legacy practices obsolete or dramatically altered. Efficiency can also a by-product of disruption. For example, improved access to health care through more convenient methods, such as web-based vs. office-based, has the potential of driving down costs while quality remains stable.
Ultimately, reducing waste in health care remains a challenge. As Uwe Reinhardt and others have reminded us, “20 percent to 30 percent of medical spending could be eliminated with no adverse effects on patient outcomes.” However, one person’s waste is another’s revenue. Reducing waste through discontinuous regulatory events, as well as disruptive technological advances, will eventually allow us to overcome the constraints of the Iron Triangle.
Steve Delaronde is director of consulting for populations and payment solutions at 3M Health Information Systems.