Category Archives: Prevention

Preventive care: Colonoscopy screening and comparing costs

Bates-DougAccording to the 2008 U.S. Preventive Services Task Force (USPSTF) recommendation statement on screening for colorectal cancer, colorectal cancer is the second-leading cause of cancer death in the United States and appropriate screening could save thousands of lives a year.

The USPSTF recommends colorectal screening for everyone between 50 and 75 years of age. There are several screening tests currently available and modeling conducted by the USPSTF suggests that any of three screening programs would be “equally effective in life-years gained, assuming 100% adherence to the same regimen for that period”:

1. Annual high-sensitivity fecal occult blood testing
2. Sigmoidoscopy every five years combined with high-sensitivity fecal blood testing every three years
3. Screening colonoscopy at intervals of 10 years

Although other screening programs are less expensive and less invasive, and effectiveness is dependent upon the experience and expertise of those performing the procedure, well-performed colonoscopies were assessed to have higher sensitivity and specificity for detecting colon cancer. This finding, along with Medicare and the Patient Protection and Affordable Care Act (ACA) mandating no cost-sharing for colonoscopies and increased public awareness, has greatly increased the number of colonoscopies performed each year.

As the number of colonoscopies performed has increased, so has the variance in total cost for the procedure. Allowed charges can vary by thousands of dollars depending on the provider, place of service, and other variables. Monitoring utilization and evaluating the charges for these procedures has become increasingly important for health plans striving to improve health while managing costs.

The 2013 version of the Milliman Health Cost Guidelines™ (HCG) grouper includes separate detail lines to track utilization and cost of facility, as well as professional costs associated with preventive colonoscopy.

Using illustrative data from three health plans, allowable charges and utilization counts for facility and professional services associated with preventive colonoscopy are shown in Figures 1 and 2 below. These data include claims for patients between the ages of 50 and 75. HCG 051b represents outpatient facility services and HCG P40b represents professional services for a preventive colonoscopy. Note that there could be related services submitted on separate claims that are not captured in these totals.

Colonoscopy Screening (1)

Utilization units are counted separately for the facility and professional services. The utilization count associated with professional services represents the total number of preventive colonoscopies because some procedures will be provided in an office setting and will not have a separate facility record.

To compare utilization rates and average allowable charges for preventive colonoscopies across the three plans, sum the allowable charges for both HCG detail lines but use only the professional unit counts to avoid double-counting of procedures, as shown in Figure 2.

Colonoscopy Screening (2)

This simple analysis compares the cost and utilization of preventive colonoscopies across three plans, but additional analyses comparing costs across places of service (e.g., office, ambulatory surgery center, and outpatient hospital) provide further insights into cost drivers associated with these procedures.

This article first appeared at Milliman MedInsight.

Lung cancer screening reading list

Milliman’s actuarial research has played a key role in the establishment of an evidence-based case for lung cancer screening. The announcement by the U.S. Preventive Services Task Force (USPSTF) stating it will now recommend lung cancer screening for certain high-risk populations follows a series of actuarial studies that helped make the value case for such screenings.

The following reading list highlights the actuarial research and also provides links to other lung cancer-related content.

An actuarial approach to comparing early stage and late stage lung cancer mortality and survival (subscription required)
This actuarial analysis of lung cancer mortality published in Population Health Management provides evidence that early detection of lung cancer generates genuine mortality reductions not associated with lead time bias, and therefore could reduce late stage deaths by over 70,000 people in the United States each year.

An actuarial analysis shows that offering lung cancer screening as an insurance benefit would save lives at relatively low cost
Using actuarial models, this study published in Health Affairs estimates the costs and benefits of annual lung cancer screening if offered as a commercial insurance benefit in the high-risk U.S. population, ages 50 to 64.

Improved lung cancer screening could lead to earlier detection
In this interview, the authors and sponsors of the first actuarial analysis of lung cancer mortality discuss the broader implications their research may have in the effort to reduce deaths associated with the disease.

An actuarial analysis of lung cancer screening
This blog post highlights Bruce Pyenson’s presentation on lung cancer screening at Health Affairs’ “Value in Cancer Care” briefing in 2012.

Wellness time machine: 1987

Workforce Management looks back at the roots of the wellness concept.

Also driving enthusiasm for workplace wellness campaigns in the 1980s was the rising cost of health benefits…

In 1987, StayWell, along with actuarial firm Milliman & Robertson (now called Milliman Inc.), released a study showing for the first time that common health-risk factors such as smoking, obesity and not wearing seat belts were strongly linked to higher health care costs. Subsequent studies backed those findings.

“It got employers very interested in costs,” [David] Anderson [of StayWell Health Management] says.

Just for the sake of nostalgia, check out the prices of various household goods in 1987. The car prices in particular caught our eye–especially with healthcare costs for a family of four in 2012 approximating the cost of a midsize sedan.

What direction is preventive care utilization heading?

The Centers for Disease Control and Prevention (CDC) released a new study indicating that half of U.S. adults are receiving preventive care, a number that will be watched as the Patient Protection and Affordable Care Act (PPACA) and its preventive incentives are implemented. The entire report can be read at

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.”

Here’s more on prevention.

An actuarial analysis of lung cancer screening

Bruce Pyenson presented his study on lung cancer screening at Health Affair’s “Value in Cancer Care” briefing on April 12 in Washington DC. Watch his presentation at – scroll down to “The Case For Lung Cancer Screening of High-Risk Patients & Improving Payment And Delivery Of Cancer Care.”

Also, here is the study’s abstract:
Continue reading

Moving towards prevention?

Edward JhuJason NowakowskiAccording to a recent article in the Washington Post, early data shows recent upticks in utilization of some preventive services by Medicare patients, presumably triggered by provisions in the healthcare reform law encouraging use of preventive care. Medicare enrollees can now obtain wellness checkups and screening tests for cancer and other serious conditions at no cost, for example.

Interestingly, the article notes that so far only the more general procedures, wellness exams, have seen significant bumps in utilization. At this early stage, it appears that utilization of more invasive screening procedures such as mammograms or colonoscopies is relatively flat even with the removal of cost sharing under health reform.

This could well speak to the heart of the preventive challenge itself, and certainly raises many questions: Will we ultimately see utilization remain stubbornly close to current benchmarks for some procedures? If removing copays is not sufficient, what kinds of incentives are necessary to get people to use the clinically-recommended levels of services? Where does education fit into the larger goal of persuading people to use them? If the right kind of utilization is incented, what will be the long-term cost implications?

Moving forward, it will be more important than ever for providers and carriers to attempt to answer these questions. Our recent report, “Benchmarking Preventive Care Utilization,” points out that there are “numerous problems that actuaries and other analysts may expect to encounter as they attempt to set baselines and benchmarks for preventive services”—not the least of them is agreeing on and communicating a definition of “preventive services” in the first place. Other issues are related to claim coding complexities, billing, medical innovations, considerations for “at-risk” patients, and finding ways to distinguish screening and diagnostic procedures.

The Washington Post article is only an early indicator, and it introduces more questions than answers. The march toward increased use of preventive care will be one of the more interesting aspects of reform to monitor as the American healthcare system goes through this period of evolution.