Sometimes the idea that keeping people healthy reduces costs can break down, but sometimes it actually works. A new article by Atul Gawande (subscription required) looks at one such instance. Here is an excerpt from the article, in which a young doctor named Jeffrey Brenner, in Camden, N.J., applies some of the statistical techniques he used as a volunteer police reform commissioner to identifying healthcare “hot spots” in his hometown:
[Brenner] made block-by-block maps of the city, color-coded by the hospital costs of its residents, and looked for the hot spots. The two most expensive city blocks were in north Camden, one that had a large nursing home called Abigail House and one that had a low-income housing tower called Northgate II. He found that between January of 2002 and June of 2008 some nine hundred people in the two buildings accounted for more than four thousand hospital visits and about two hundred million dollars in health-care bills. One patient had three hundred and twenty-four admissions in five years. The most expensive patient cost insurers $3.5 million.
We’ve blogged before about geographic cost disparity in healthcare, though never at so granular a level. Given the hope attached to reducing admissions and readmissions as a way of controlling healthcare costs, it seems reasonable that a formula that identified “super utilizers” as they are called and focused on improving their care (and minimizing unnecessary utilization) would help to reduce costs.