The Iron Triangle of Healthcare

MMI 401

Francisco E. Figueroa

According to the Academy of Integrative Health & Medicine (2015), “The Iron Triangle

and the Triple Aim”, the Iron Triangle help to define the relationships between cost, quality and

access (depicted in the following graphic) . In Godfrey,T (2012), “What is the Iron Triangle of 1

Health Care?, mentioned that “The Iron Triangle is a mechanism used to assess health care

system of all kinds”. In the Iron Triangle of Healthcare, the cost means a healthcare system 2

that needs to make costs affordable for the

patients and payers. Quality is the outcome

of the care being delivered to patients. And

access, looks who gets care. The concept of

the Iron Triangle was used during the recent

reform passed by Congress in 2010.

If we analyze The Iron Triangle from the patient, provider and payer perspective. The

patient should get access to health care services at affordable cost with better health outcomes.

From the provider perspective, the providers need to deliver better health outcomes to patients

and get paid reasonably accordingly to the services and outcomes delivered. From the payer's

perspective, the payers need to give access options to patients, so they can get affordable health

1The Iron Triangle and the Triple Aim. Retrieved October 22, 2015, from https://aihm.org/publications/journal-club/integrative-medicine-iron-triangle-triple-aim/ 2 Godfrey, T. “What Is the Iron Triangle of Health Care?” The Penn Square Post . Web. 23 Oct. 2015. <http://pennsquarepost.com/what-is-the-iron-triangle-of-health-care/>

care services and the highest quality possible. According to Robert M. Dugan (2012), “Breaking

the Iron Triangle”,

Aaron Carroll (October, 2012) JAMA Forum — The “Iron Triangle” of Health Care:

Access, Cost, and Quality states that “we can make the health care system cheaper (improve

cost), but that can happen only if we reduce access in some way or reduce quality”. So if you

decrease one of the corners of the triangle there will be a price to pay in some way. So if you

reduce cost, access might be improve and quality will be impacted severely in a fee-for service

model. If you rise the cost, access will be reduced and quality might improve. According to

Academy of Integrative Health & Medicine, (2015), “The Iron Triangle and the Triple Aim”,

health care economists have contented the dynamic tension in the Iron Triangle between the

three corners of the triangle (cost,quality and access); the model recognizes required trade-offs

around health care policy; and The Patient and Protection Affordable Care Act (PPACA) is

designed to deal with the contention between the corners. According to The Henry J. Kaiser 3

Family Foundation, “Summary of the Affordable Act”, President Obama signed comprehensive

health reform that focuses on provisions to expand coverage, control health care costs, and

improve health care delivery system. The Medicaid expansion, the creation of the Affordable 4

Care Organizations, the creation of the health insurance exchanges, prevention and wellness

initiatives, and value-based purchasing programs are good examples that impact The Iron

Triangle.

3 The Iron Triangle and the Triple Aim. Retrieved October 22, 2015, from https://aihm.org/publications/journal-club/integrative-medicine-iron-triangle-triple-aim/ 4 The Kaiser Family Foundation provides a summary of the Patient Protection and Affordable Care Act (PPACA): Retreived from http://www.kff.org/healthreform/upload/8061.pdf (Links to an external site.)

High cost of care does not mean higher quality, we have the example of McAllen

(Gawande, 2009 ) that is one of the most expensive health-care markets in the country but not the

best health quality. In the opposite we have the Mayo Clinic case which has high levels of

technological capability and quality, but its Medicare spending is in the lowest fifteen per cent of

the country—$6,688 per enrollee in 2006, which is eight thousand dollars less than the figure for

McAllen. So the Mayo Clinic, in The Triangle model is delivering quality and containing cost 5

and as a resultant patients have access to these type of health care services.

According Robert M. Duggan (2010): “Breaking the Iron Triangle”, cost, quality and

access corners is widely accepted as an unbreakable conundrum, but it is actually a false one. 6

That’s why the PPACA came into the place by building innovative payment models like the

Value-Based Purchasing. When analyzing the Value-Based Purchasing (VBP) program in

depth associated to The Iron Triangle we must understand that the VBP is meant to encourage

specific quality and cost outcomes based on agreed-on performance measures. (Jonas and 7

Kovcer, 2011). VBP will help to generate savings while increase value. Value-based purchasing

has the concept of rewarding high-quality health care, differential payments, and consumer

selection is possible by measuring performance. Health plans, medical groups, hospitals and

practitioners must be part of the measurement for performance.

The Value-Based Purchasing program it has two inherent corners in The Iron

Triangle and a third that is often times overlooked. These two inherent corners are cost and

quality. The question is how VBP give more access to health care? High cost means

5 Gawande, A. (2009, June 1). The Cost Conundrum; What a Texas town can teach us about health care. the_cost_conundrum_article.pdf 6 Duggan RM. (2010). Breaking the Iron Triangle 7 Kovner, A. R., & Knickman, J. R. (2011). Jonas and Kovner’s health care delivery in the United States (10th ed.). New York, NY: Springer. [ISBN-13: 978-0826106872]

decrease in access to health care services. Low cost can increase the access but can hurt the

quality. From my point of view, access in the case of VBP is the resultant of cost and quality.

The corner of cost in managed by payers and providers; the corner of quality is managed by

providers and monitored by payers; and patients can get access to affordable cost and health

care quality of the service delivered. When you analyze the used by Mayo Clinic, they

continually demonstrate that the third corner, access, can be fulfill in an scenario with high

quality, excellent patient experience and low cost.

At the end, the PPACA is trying to disrupt the Iron Triangle. Several payment

models will continue to evolutionate until the nation can make the balance between cost,

quality and access. There will be institutions that will be like McAllen and others will follow

the Mayo Clinic model. This need to be a continuous collaborative effort between payers,

providers and patients. The Value-Based Purchasing Program for both inpatient and

outpatient scenarios will be deliver value to providers, patients, and payers if health care

services are delivered under a structure that deliver quality at a reasonable cost and access

will be improve to patients.

References:

The Iron Triangle and the Triple Aim. Retrieved October 22, 2015, from

https://aihm.org/publications/journal-club/integrative-medicine-iron-triangle-triple-aim/

JAMA Forum - The. (2012, March). Retrieved October 23, 2015, from

http://newsatjama.jama.com/2012/10/03/jama-forum-the-iron-triangle-of-health-care-acces

s-cost-and-quality/

What is the Iron Triangle of Health Care? Retrieved October 23, 2015, from

http://pennsquarepost.com/what-is-the-iron-triangle-of-health-care/

Duggan RM. (2010). Breaking the Iron Triangle

Kovner, A. R., & Knickman, J. R. (2011). Jonas and Kovner’s health care delivery in the United

States (10th ed.). New York, NY: Springer. [ISBN-13: 978-0826106872]

Gawande, A. (2009, June 1). The Cost Conundrum; What a Texas town can teach us about health

care. the_cost_conundrum_article.pdf