Looking in the Wrong Place?

It is no secret that there is a lot of waste in healthcare. Even if one leaves aside the most egregious examples such as duplication of tests and patient harm that necessitates more care, we still collectively do a lot of stuff that does not improve health. A recent report in Health Affairs changed my assumptions about what that stuff looks like.

The authors analyzed claims data from an all payer database in Virginia for services provided in 2014. They prospectively defined 44 services that were of “low value” defined as providing no net health benefit in specific clinical circumstances. Their assessments were based on nationally recognized standards, including the “Choose Wisely” campaign of the ABIM, the US Preventive Services Task Force, CMS criteria, and others. They then scoured the database to see how frequently these services were provided, and calculated the aggregate costs associated with them.

Two findings stand out:

  1. The services were prevalent: patients in Virginia received a total of 1.7 million low value services in 2014, for a total cost of $586 million.
  2. Because low cost services were so much more frequently performed than high cost services (think useless blood test instead of useless MRI), almost two thirds of the total cost was driven by the low cost ones.

The conclusion that more money is wasted on “a lot of little things” instead of “a smaller number of big things” ought to change how we approach efforts to lowering the cost of care. It suggests that tight utilization management of “big ticket” items may not have the impact of changing more “every day” patterns of care. That seems harder to me, but it also seems like work that has to be done, and it will require strong physician leadership to accomplish.

What do you think?

2 thoughts on “Looking in the Wrong Place?

    1. About your specific point here, my first wife Sarah’s parents were both physicians in the British National Health Service. They told me that they got paid a flat fee (like a retainer) that actually provided incentives to them to lower costs, to see less of their patients, not to over prescribe tests, etc.

      Unfortunately socialism has been a dirty word in America for a very long time.

      My impression is that Trump’s Presidency returns us to the situation of the ante-bellum south, characterized by paternalism, adulation of rich plantation owners and a generally disdainful attitude to the working classes and the poor.

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