Some of you may remember this interview from last May, which explained the results of a 2009 study for the Lung Cancer Alliance that used actuarial methods to clarify the opportunity posed by lung cancer screening.
The case for increased lung cancer screening gained more momentum last week when the Los Angeles Times reported on the results of an analysis by the National Cancer Institute. Here is an excerpt from the Times article:
Advanced CT imaging can reduce deaths from lung cancer by 20% among heavy smokers by detecting tumors at an earlier stage when they are more treatable, according to results released Thursday from the first study to compare the value of CT scans and regular chest X-rays for lung cancer screening.
The long-awaited results of the trial involving more than 53,000 former and current heavy smokers were so conclusive that the study was terminated ahead of schedule last week and letters were sent to all the participants advising them of the results.
The findings are considered a major step forward in fighting the most deadly form of cancer — which is expected to kill an estimated 157,000 Americans this year — because chest X-rays have never been proven to be an effective tool for identifying tumors. CT scans are more powerful and provide a much clearer picture of the lungs.
Analysis of Medicare cost and utilization data has been extensively documented, most notably by the Dartmouth Atlas, and has revealed significant variation from one region to the next. Similar analysis using commercial insurance data, however, has been lacking. This study, the first to consider commercial populations, examines regional cost variation, providing cost relativities for claims paid by commercial payors for particular hospital referral regions. Among other findings, the study highlights the importance of negotiated provider reimbursement as a factor in the nation’s healthcare cost. While Medicare sets provider reimbursement rates based on formulas and rules, commercial provider reimbursement is set by negotiation between the insurer and the provider. This means, among other things, that regions with low Medicare costs could have high commercial costs. An examination of commercial data alongside Medicare data is crucial for understanding the true nature of healthcare cost variation across the country.
The Health Beat blog revisits a study from last year, “Imagining 16 to 12.” Here is an excerpt summarizing the article:
Could we bring our nation’s health care bill down from 17% of GDP to 12%? An intriguing study from Milliman, the independent consulting and actuarial firm, says”yes.” Looking at actuarial data from some of our best and most efficient health care plans, Milliman’s analysts conclude that, in theory, it would be possible to trim our bloated health care system by 25%.
Before you dismiss the idea, consider this: not that long ago, we brought health care inflation down to less than 3% a year for six years running (1994-1999). During that time, the nation’s health care bill remained flat as a percentage of GDP.
And Milliman points out that today, our most efficient , high quality health plans are achieving similar savings by “reducing unnecessary inpatient stays” and “inappropriate imaging.” The site of service also changes to emphasize lower cost settings—for example, home care instead of nursing-home care, or office-based primary care instead of emergency room care. The authors of the Milliman report acknowledge that 12% is only a “target for what is possible, not a budget.” They are not suggesting that we try to cap health care spending at 12% of GDP.
But the actuarial firm points that that in the not-so-distant past (1991) health cared did consume just 12% of GDP. Now it equals 17% of the economy. Granted, medical technology continues to advance, but have we really made that much progress since the ‘nineties?
Read the full article here.
Families USA published a report today quantifying the cost of uncompensated care received by the uninsured and detailing how those costs are absorbed by American families with commercial insurance. To quote the Wall Street Journal:
The average family in 2008 saw $1,017 in health-insurance costs passed on from those without insurance, according to a report released Thursday by the advocacy group Families USA.
The report found that individuals with health insurance paid a “hidden health tax” of $368 to cover those without insurance. The report found that a total of $42.7 billion in care for those without insurance was passed on to health insurers – which in turn pass on the costs through higher premiums.
The report comes as Congress debates proposals to provide health-insurance coverage to all Americans – a key part of President Barack Obama’s legislation agenda. It uses data primarily from the consulting firm Milliman Inc.
See the full report
Or read NPR’s take here
Or the AP
Or business journal coverage
NPR interviewed Peter Orszag of the White House Office of Management and Budget this morning. While the entire interview is worth a listen, one quote jumps out:
Estimates suggest that as much as $700 billion a year in health care costs do not improve health outcomes. It occurs because we pay for more care rather than better care. We need to be moving towards a system in which doctors and hospitals have incentives to provide the care that makes you better, rather than the care that just results in more tests and more days in [the] hospital.
That $700 billion in waste squares with estimates from “Imagining 16% to 12%: A vision for cost efficiency, improving healthcare quality, and covering the uninsured.”
The latest post at The Health Care Blog features an article by Bruce Pyenson, Kate Fitch, and Sara Goldberg about their recent healthcare reform report, “Imagining 16% to 12%,” which provides an actuarial yardstick for health reform proposals and efficiency targets for the US healthcare system.