On the issue of preventive care, Ed Jhu and Jason Nowakowski evaluate the effects the PPACA’s reforms may have on preventive care utilization in their paper “Benchmarking Preventive Care Utilization.” They conclude:
“In general, we have found that current utilization of preventive services is roughly 60% to 70% of what is clinically recommended in PPACA for many services. However, there is fairly significant variation by service, which is due to either variation in actual utilization rates or to measurement difficulties related to some of the factors identified previously in the report. We did see higher utilization for childhood-related services thank for adults, likely for the obvious reasons: parents taking better care of their children than they do of themselves. Children are also often required to have certain vaccinations and procedures in order to attend schools. Additionally, it’s routine for newborns to be administered a certain regimen of preventive services. In general, it seems to be easier for adults to put off the preventive services recommended for them.
There’s little in the pre-PPACA data to indicate where the preventive care trends are going to go next – except, very generally, up. The focus on preventive care in the reform measures, and the publicity surrounding them alone, will presumably push utilization in that direction. There are also certain health plans that don’t presently cover some of the procedures, but will be required to now. That, coupled with the fact that many of the procedures must be offered with no copays, would also tend to suggest greater utilization moving forward. While it’s unlikely that utilization of preventive services will ever reach 100%, it is certainly possible we will see it go up from the current levels.”
According to a survey by Americas Health insurance Plans (AHIP) the number of individuals insured by high-deductible health plans (HDHPs) in conjunction with health savings accounts (HSAs) grew 18.4% this year to 13.5 million from 11.4 million in 2011. AHIP data shows that this type of consumer-driven health plan (CDHP) has increased gradually since it was introduced in 2004. Read more about AHIP’s survey at Workforce.com. You can also read the entire survey here.
One question arises from the aforementioned survey: Do CDHPs help reduce costs? Jack Burke and Rob Pipich’s detailed analysis on high-deductible plans found that when adjustments are made for typical risk and benefit factors, CDHPs deliver cost savings that are modestly better than non-CDHPs. Here is an excerpt:
“Most employers we examined showed savings in the CDHP plan before adjusting for risk and plan design characteristics; however, the bulk of the apparent savings was explained by these adjustments. After adjustments, the reduction in combined employer and employee costs averaged 4.8% before accounting for the utilization-dampening impact of the high deductible. Accounting for the high deductible made the reduction 1.5%. Some employers showed significantly greater reductions.”
This 1.5% reduction is what’s known as “induced utilization” and is a key element of CDHPs. For more, read Milliman’s complete Consumer-Driven Impact Study.
Younger people are also going to the hospital more often here than in other regions. A 2010 study by the actuarial firm Milliman found that for commercially insured individuals, the Pittsburgh region had 6 percent more hospital admissions and 26 percent more emergency room visits than the national average. We had one of the highest rates of emergency room use among 33 regions it analyzed.
High rates of hospitalizations, surgeries and emergency room use are not only expensive, but they’re also signs that the region’s health care systems aren’t functioning efficiently or effectively.
Many of the chronic disease patients being hospitalized today could stay healthier and avoid the need for hospitalization through better primary care and patient support services.
A great place to start is by reducing readmissions — Pennsylvania Health Care Cost Containment Council data show that 23 percent of the chronic disease patients in Pittsburgh who are hospitalized end up back in the hospital in less than a month. These high readmission rates can be significantly reduced; for example, projects organized by the Pittsburgh Regional Health Initiative at UPMC St. Margaret and at Premier Medical Associates showed that improving care for chronic disease patients can reduce readmission rates by 40 percent or more.
[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.
A new study commissioned by Innovent Oncology looks at cancer-related utilization. The study, which was announced today, identifies both regional variation as well as ways to improve quality and efficiency in cancer treatment. Here is an excerpt from the press release:
Innovent Oncology commissioned Milliman’s [Kate] Fitch and co-authors in New York to evaluate 10 of the most common cancer types where chemotherapy is a key treatment modality. The utilization and cost metrics examined include: chemotherapy-related hospitalizations; chemotherapy-related emergency room visits; chemotherapy costs; and end-of-life care including hospice enrollment, death in a hospital and chemotherapy administration within 2 to 4 weeks of dying.
The study used a nationally representative claims database of 14 million commercially insured lives. The 10 cancers identified in the study account for 65% of cancer patients in a commercial population and approximately 25% of these cancer patients received chemotherapy treatment during the observation year. The members receiving chemotherapy and having one of the 10 cancers make up about 0.11% of commercial members, but account for about 4% of overall healthcare costs.
Regional variation is identified with respect to the first three metrics listed above. Chemotherapy-related inpatient admissions and emergency room visits show a two-to-three fold regional difference in rates and chemotherapy drug costs range from $17,000 to $27,000. These regional differences suggest opportunities for health plans and plan sponsors to improve quality, thereby reducing cost and utilization.
Proactive end-of-life care provides patients with higher quality care and both patients and payers with additional quality and cost savings opportunities. For chemotherapy patients with the 10 cancers that were identified as dying in an inpatient setting, 24% received chemotherapy within 14 days of dying and 51% received chemotherapy within 30 days of dying.
“This is a comprehensive commercial payer view of cancer patients receiving chemotherapy and various cost drivers,” says Kate Fitch, RN, MEd, Principal and Healthcare Management Consultant with Milliman. “We are very pleased that Innovent Oncology is publishing this report, especially because there is a growing concern over variation and waste in cancer care.”
Look first at the hospital components of this cost trend.
The inpatient cost trend increased from 7.1% to 7.7% this year. Utilization remained flat and the increase was instead driven by unit costs.
The outpatient cost trend increased from 9.4% to 10.2%, again largely due to an increase in unit costs.
The physician cost trend decelerated, though physician costs remain the biggest piece of the puzzle.
Pharmacy costs saw a deceleration in the cost trend but still increased higher than other components of care at 7.9%, with just under 40% of that due to increased utilization. The increased use of generics over previous years complicates this cost trend.