How to save $7 billion in five easy steps

June 1, 2012

Providers pledge to drive out waste by avoiding certain unnecessary services, and many believe it's a good first effort at true cost control.

Clinical providers are taking a new pledge. It's not the Hippocratic Oath exactly, but an ethical decision that extends primum non nocere-first, do no harm-into new territory.

Joining the industry's other stakeholders in practical cost-control solutions, providers are embracing the concept of waste reduction. Rather than shrugging their shoulders and passively watching costs escalate, physicians of all disciplines are committing to an attitude of stewardship, based on choosing not to deliver certain medical services in certain situations in which the care might be wasteful or harmful. The services are outlined in fairly simple top-five lists.

"We are arriving at this idea of good stewardship and, in our professional judgment, defining the things that we shouldn't be doing because it's not right for our patients," says Stephen Smith, MD, Brown University professor and treasurer of the National Physicians Alliance (NPA).

The campaigns are a bold move because reducing waste ultimately means fewer services will be delivered, which translates to fewer claims and less cash in providers' pockets. In fact, the recommendations coming from various specialty societies arguably mark the first significant effort on the part of providers to control costs. Waste accounts for an estimated 30% of the nation's total healthcare bill, or $750 billion annually. Even a modest reduction could impact a practitioner's bottom line.

But health plans, hospitals and pharmaceutical companies offered their cost-control pledges years ago-generally in support of the Patient Protection and Affordable Care Act. In the case of health plans, they acquiesced to medical-loss ratio policies, knowing the profit loss would be counterbalanced somewhat by the promise of increased membership.

Providers, on the other hand, have historically been reluctant to acknowledge the systemwide overuse of services. New payment models will likely become the counterbalance they need to ease their financial concerns.

Societies identify top five

National initiatives have recently emerged as evidence of the good-stewardship trend among providers.

In April, the American Board of Internal Medicine (ABIM) Foundation launched its Choosing Wisely campaign with a series of top-five lists. The lists, compiled by specialty, identify 45 common clinical activities where changes in practice could lead to better care and better use of resources. Each list outlines activities that physicians should avoid because they would be contrary to best practices and, most likely, would be considered waste. Nine societies have contributed thus far.

As a precursor to Choosing Wisely, NPA used a grant from ABIM in 2009 to develop top-five lists for family practice, internal medicine and pediatrics, under what it calls the Good Stewardship project. Thanks to a second grant, the recommendations are now being implemented and tracked for effectiveness in three practice organizations.

The Good Stewardship project was a springboard that helped inspire ABIM to create the larger Choosing Wisely program and invite the medical community's specialty societies to develop their own top-five lists of overused or unnecessary services. Dr. Smith, who is the principle researcher for Good Stewardship, says the avoidable activities outlined on the lists aren't as important as the fact that culture of medicine is changing.