To make health care reasonably profitable for private payers and more affordable for patients, those who are responsible for managing the care must concentrate on reducing cost (which, by the way is far easier than increasing the health benefit or medical loss ratio).
Unfortunately, as Berwick and Hackbarth point out, "programs to contain costs use cuts, such as reductions in payment levels, benefit structures, and eligibility. A less harmful strategy would reduce waste, not value-added care." The authors are adamant that the opportunity is huge and far greater than one could possibly achieve from "more direct and blunter cuts in care and coverage."
Reducing the cost of doing business is usually preferable to spending tons to generate new business or spending with reckless abandon--over testing, for instance, what some call 'shotgun medicine.' Waste management, by definition improves efficiency and cost-effectiveness; once that is a core competency, it is easier to strategically invest scarce resources in making marginal if not major improvements in access and quality.
"In just 6 categories of waste—over treatment, failures of care coordination, failures in execution of care processes, administrative complexity, pricing failures, and fraud and abuse—the sum of the lowest available estimates exceeds 20% of total health care expenditures."
Caveat: "The potential economic dislocations, however, are severe and require mitigation through careful transition strategies."
Donald Berwick, MD, MPP and Andrew Hackbarth, MPhil in "Eliminating Waste in US Health Care" Published online in JAMA, March 14, 2012 [Free full text, available]
A Clinical/Organizational/Analytical/Continuous Improvement Leadership Team "needs:
- Adjudicated claims data with a total illness burden methodology so that they may identify risk factors and patient segments who might benefit from interventions
- Clinical data to identify gaps in care and other risk factors
- Reports that identify variation on multiple variables by physicians, practices, groups, facilities and patient segments
- Tools that combine the clinical and claims data into a comprehensive view of each patient that can act as a care management plan
- The ability to push prioritized alerts to care teams ready to use those alerts to improve outcomes – ideally across widely variable primary care electronic medical records
- Prepared and proactive care teams ready to engage in outreach, care coordination and care management"
L. Gordon Moore, MD, (3M HIS Sr. Medical Director; Populations and Payment Solutions). "First steps in population health management: Setting up a population health management team."
It is noteworthy that social media references: PWC Health Research Institute's "The price of excess: Identifying waste in Healthcare spending, 2008." [https://twitter.com/HCITConsultant]
Example of data capture and use in care coordination
Patient Connect is a web-based technology that "operationalizes" [sic.] the coordination of health care, particularly pertaining to patient transfers by giving "visibility to key data from inside and outside a hospital", allowing health systems to "use and share key data and to make decisions in real time to improve patient care." Patient Connect claims it is "providing actionable data analytics and reporting through dashboards and automatically-delivered reports and threshold alerts." Central Logic Patient Connect positively impacts nine key indicators on the continuum of care: clinical standards, discharge planning, population health management, readmission reduction, patient experience, value-based care, quality assurance and compliance, care coordination, and real-time analytics and dashboards.
A Poignant Example of Waste in Legitimate Care (Low Hanging Fruit)
Witness the shift from "volume-based to value-based care. One approach to improving the value equation is the elimination of unnecessary or wasteful tests and procedures. This forms part of the basis of the Choosing Wisely campaign from the American Board of Internal Medicine where not paying for routine preoperative evaluation in low-risk patients is an example of cost containment 'low hanging fruit.'
"30 million Americans undergo surgery annually and approximately 60% of them undergo a procedure on an ambulatory basis." Therefore, the "elimination of extensive preoperative tests and consultations represents an area of potentially large health care savings. In this issue of JAMA Internal Medicine, Thilen and colleagues demonstrate not only that this is not occurring but that the incidence of preoperative consultations is actually increasing in the Medicare population for patients undergoing cataract surgery."
Fleisher LA. "Preoperative Consultation Before Cataract Surgery: Are We Choosing Wisely or Is This Simply Low-Value Care?" JAMA Intern Med. Published online December 23, 2013. doi:10.1001/jamainternmed.2013.12298
Coordinating, Communicating and Comprehensive Care Management
"Gaining Value from Post-Acute Care: Incentives, Structure or Management?"
"It is well known that a viable source of health dollar savings is the efficient use of post-acute care (PAC) services. MedPAC has identified widespread variation in post-acute care utilization, with limited control over the reasonableness and quality of service provided. This situation has resulted from three factors: confusion as to what constitutes PAC (defined by program benefit), fragmentation of PAC payment (which tends to be site rather than service specific) and the absence of comprehensive risk-adjustment to determine the relative intensity and need for PAC services. Substantial opportunities to improve risk-adjustment will be available after the implementation of ICD-10 (which contains significant numbers of continuation of care codes), particularly if the Continuity Assessment Record and Evaluation (CARE) is also implemented across PAC settings."
Provider Health Plans
"Over the past two years, the number of provider-affiliated health plans has more than doubled, topping 270 health plans. However, the scope of most new plans is very narrow. Two-thirds of the new plans serve only one population (e.g., Medicare), and 40 percent are at risk for fewer than a thousand dual eligible members (Medicare and Medicaid). There are five challenges these new plans can’t afford to underestimate:
- Payment design — Health plans should consider clinical outcome (benefit) and cost (utilization) incentives; shared-savings and bundled payment programs
- Provider network management — the right care at the right time and place, direct patients to high-value practitioners and facilities, reduce leakage, coordinate care and communication
- Care management — from early intervention to other forms of prevention, case management and in a word–"caring"
- Risk [pool] management — analytics that can be used to redirect or refinance (cover) care
- Provider Health Plan Data sharing — Access diverse data sources, share data with sundry practitioners and service providers. But, not only data, but data within "population health management tools and integrated in workflows." IOW, "Everyone within the care delivery system needs to know how they are performing, which members are at risk, and how to act to provider cost-effective care."
"It’s a brave new world for provider-affiliated health plans, but promising, too, given the rise of technology. Health care is a laggard industry in adopting digitization and big data. Now is the time to catch up to be able to manage the challenges or risk-based and value-based care."
Daynnes, Kristine. "Five things “payviders” can’t afford to overlook." (Inside Angle from 3M Health Information Systems), posted July 25th, 2016
"Value-based" contracting is the new name for managed care
Modern Healthcare (2/20/16, Herman; subscripion) reported that value-based contracts, “in which insurers pay for drugs based on their effectiveness, have begun to sprout, and more are expected to follow.” Still, experts “believe these types of deals, although potentially beneficial, are not a panacea for managing drug costs.” Such deals also may “be hard to orchestrate [as they require practitioners], insurers, ..... benefit managers and drug companies, often rivals, to cooperate and share data.”