Low-cost, high-volume health services account for a high percentage of unnecessary health spending, according to a new study, published in Health Affairs.
A team led by UCLA researchers analyzed claims data on patients in Virginia that reflected nearly all public and private payment sources, including fee-for-service Medicare, Medicare Advantage, Medicaid, private insurance, as well as consumer out-of-pocket costs.
Forty four services that were designated as “low value” in specific clinical situations according to evidenced-based guidelines were analyzed. These services likely represent only a small proportion of “low-value care,” defined as having little or no health benefits in certain clinical situations.
The low-value services in certain situations included:
· Lab tests for low-risk patients undergoing low-risk surgeries;
· Stress cardiac or other cardiac imaging in low-risk patients without symptoms;
· Routine head CT scans for simple dizziness; and
· Imaging within the first six weeks of onset for low back pain without any other medical red flags present. This is the most common presentation of back pain that typically resolves itself.
Researchers found that the 5.5 million people in the database received 5.4 million of the 44 services. Of that number, 1.7 million were low value, meaning that nearly one-third of the time they were medically unnecessary, and 3.4 million were high-value services that carried health benefits. Looking at the low-value services, they found that 1.6 million (93%) were very low cost and low cost ($538 or less per service), compared with 119,000 (7%) that were high and very high cost ($538 or more).
The cost for low- and very-low-cost, low-value services totaled $381 million, compared with $205 million for high- and very-high-cost, low-value services. This $586 million represented 2.1% of Virginia’s total $28 billion in healthcare costs for the year. Overall, about 20% of the 5.5 million people received at least one low-value service during the year analyzed.
The decision to employ Milliman’s MedInsight Waste Calculator to the data obtained through Virginia’s All Payer Claims Database was originally undertaken as part of Virginia’s State Innovation Model Design grant from the Centers for Medicare and Medicaid Innovation.
“We had strong multistakeholder support in Virginia from our employer, health plan, health system, and clinician partners to see how we could tackle low-value healthcare in a data-driven way,” says Beth A. Bortz, president and CEO, Virginia Center for Health Innovation (VCHI).
One step further
VCHI wanted to take the thinking behind the ABIM Foundation’s Choosing Wisely initiative, that seeks to advance a national dialogue on avoiding wasteful or unnecessary medical tests, treatments and procedures, by tying its improvement plan to real Virginia data.
“In this way, we could actively measure our impact and identify future targets for improvement,” Bortz says. “Healthcare value can be improved in two ways—by reducing the number of low-value healthcare services or by increasing the number of high-value services. While both actions are worthy goals, efforts to reduce low-value healthcare are a more urgent priority, since the associated savings will be required to support the purchase of additional high-value services.”
“The current economic incentives in healthcare typically reward the provision of more services, regardless of their value to the patient,” Bortz says. “The same service that can be lifesaving for one patient can be harmful and unnecessary for another. What is needed is clinical nuance to determine if we are providing the right service, at the right time, to the right patient.”