Streamlining Health Care: Losing Waste, Gaining Value

Streamlining health care cannot come soon enough. Too much money is spent or wasted on unnecessary tests and treatments for the average patient. You know it. Your employees most likely know it. But you and your employees — like many others — may be skeptical of the coming changes.

Consider this: Value-based insurance design (VBID) is not catching on with consumers. VBID was designed to drive consumers to choose high-value services while discouraging use of lower-value ones. It does this through pricing higher quality services more attractively than low-value services.

Consumers are simply distrustful of what an insurance company deems to be of high quality. A recent study in Health Affairs explored this consumer resistance, noting that “existing quality measures lack meaning to consumers.”

One of the most compelling and disturbing findings is that consumers who make informed decisions don’t necessarily obtain higher-quality care. Chalk it up to information overload.

The solution? Education and tools, the authors concluded. While evaluating VBID scenarios, “participants were skeptical of the value-based trade-offs and reported seeking the information they wanted instead of relying on information that health plans provide.”

To persuade consumers to cut waste through VBID, it’s important to clarify the trade-offs involved in their choice of care, as well to communicate with them via trusted networks and sources.

Documenting Waste

A 2017 ProPublica investigation explored what was behind the $765 billion wasted on health care each year. They found administrative red tape, inflated prices and an array of other factors, including unneeded medical services. Streamlining health care would greatly reduce that waste, since value-based approaches can help eliminate unneeded services.

Almost one-third of health care spending in the U.S. ($530 billion each year) went toward services with little or no value, according to a study in the Permanente Journal. Moreover, the same percentage of “procedures, tests and prescribed medications may be of questionable benefit.”

For instance, NPR reports that women still receive annual cervical cancer screenings even though it’s generally needed only once every three to five years. In fact, a review of insurance claims from 1.3 million patients in Washington state found that 75% of annual cervical cancer screenings were unnecessary. The cost: $19 million.

It also found that roughly 85% of the preoperative lab tests performed on healthy patients undergoing low-risk surgery were unnecessary. The cost: $86 million.

Who’s to blame? The Permanente Journal paper reports that 69.5% of physicians surveyed cited “patient or family concerns or expectations” as “often a reason” for equivocal (equal balance of harm/benefit) or inappropriate care.

But blaming patients isn’t productive, and it’s probably inaccurate. For example, Kaiser Health News says that 52% of breast cancer patients undergo a long, costly, painful and inconvenient course of radiation despite being eligible for a shorter course. And here’s the kicker: The medical evidence supports a shorter regimen, but patients aren’t told this is even an option. How can they play a role in streamlining care if they don’t know their options? As the Health Affairs article notes, they need education and evidence.

Streamlining Health Care

The beauty of relying on medical evidence is that it often suggests a more efficient and effective approach to care.

Take South Carolina Medicaid’s Birth Outcomes Initiative. Physicians and hospitals simply were not paid for early elective deliveries that were not medically necessary, cutting early elective deliveries by 51% and elective inductions by 55%, saving $6.1 million. Today, more than three-quarters of the state’s birthing hospitals have no non-medically necessary early elective deliveries, Healthcare Dive reports.

Highmark — a Blue Cross Blue Shield organization — saved roughly $260 million in 2017 with its True Performance Program. The program led to 11% fewer emergency department visits and 16% fewer inpatient admissions. It pays for performance and reimburses providers based on their ability to deliver timely and appropriate care. A big part of that is waste reduction: Highmark developed a system of sharing data so physicians could provide the most effective treatment the first time.

Another aspect is care coordination. Coordinating care across the continuum also reduces waste: Because all the providers are in the loop, there’s less chance of redundant or unnecessary medical tests.

Evidence Trumps Skepticism

There’s a wealth of evidence demonstrating waste in the fee-for-service system and the actual and potential savings of a value-based approach. So yes, your employees are skeptical. But they see both the problem and the value of streamlining health care; they just need to understand the evidence-based solutions.

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