04:08 PM PST on Friday, January 28, 2005

By JIM KLOCKOW / KING5.com

AP

It's bad enough that the cost of health care is moving skyward at a record pace. But it's worse that nearly half that cost doesn't even go towards getting better.

According to a 2004 study by the Rand Corp. 41 percent of health care dollars spent in the Seattle area "does not contribute to better health outcomes."

Some of that money is lost to waste and inefficiency.

Now a newly formed alliance of businesses, government, health plans and others hope to strip out at least some of that waste and in the process improve health care, not just for its members, but region wide.

"Our health care system in its present state cannot deliver the quality of health care our region deserves," said King County Executive Ron Sims.

Sims and 18 other members of the newly formed Puget Sound Health Alliance announced at a press conference Friday that the number of people now represented by the group's members has reached 300,000 in King, Pierce, Kitsap and Snohomish Counties.

Among its employer members are some Northwest icons: Starbucks, Washington Mutual and REI.

The 300,000 insured people now represented by the Alliance - a nonprofit - is a milestone of sorts because it's more than halfway to the point where the market clout of the group will begin to have a broader affect on the whole community, according to Alliance staff.

The group is all about the power of information to influence the behavior of all the players in the health care system and reduce the rate at which health care costs are increasing.

The system is intended to work like this: Alliance members agree to share non-identifiable information on health care procedures, usage and outcomes and bring it all together in one place along with treatment guidelines and other tools for members, including employers, employees and health care providers, to use.

Employers can then analyze the health care usage of their employees, compare them to the broader community and make decisions about plans and coverage accordingly or tailor education campaigns to the health care needs of employees.

Similarly, doctors, hospitals or plans whose treatment outcomes fall short can be coached into providing better treatment. But providers may also be identified as a way of pressuring them to do better, which would have benefits even for people who are insured by organizations that aren't a member of the Alliance.

This last piece is akin to the influence the magazine Consumer Reports has on car makers, according to Jonathan Sugarman, President and CEO of Qualis Health, an Alliance member.

Not everyone reads the magazine, he said, "but car makers don't make cars that rollover."

The alliance will be supported by member dues. Employer members pitch in $5 per covered employee per year. Heath plans pay based on their revenue, generally between $40,000 and $80,000.

Health care providers will also be members but pay no dues because part of the plan will require some of them to adopt uniform ways of treating certain illnesses. Many doctors now have to spend time navigating the treatment protocols of different insurers, some of which may be inferior to other methods of treatment.

Keeping costs down isn't really an option, according to Washington Mutual Vice Chair of Development Craig Tall.

"This is a point in time where this has to happen."