Tag Archives: Utilization

Healthcare industry must evolve with direct-to-consumer genetic testing utilization

The growth of direct-to-consumer (DTC) genetic testing presents several medical and financial implications for the healthcare industry to consider. In this article, Milliman consultant Barbara Culley examines the demand for DTC genetic testing and industry concerns. The excerpt below highlights a few of them.

Providers and regulators have expressed concerns about the DTC process, including the absence of healthcare providers from it, concerns for unnecessary testing, patient anxiety, erroneous test results, and misinterpretation of test results by untrained consumers. Insurers have concerns about the possibility of adverse selection. If a person knows they have a positive indicator for a disease, will those people seek insurance in greater numbers than those without any genetic concerns?

One key factor driving concerns is that not all persons with a positive genetic test will develop the indicated disease. Many variables, including environment, personal lifestyle choices, and other genetic factors, have a significant impact on health. Concern exists that genetic test results may lead to unnecessary treatment. In the case of false positive and false negative outcomes, the added concern is that treatment choices may be made in error. In a 2012 study13 of 179 people from four countries, the average person was found to have about 400 defects in their genes, some associated with disease. However, these people were well. Even if results cause people to seek insurance or care, they may never develop the disease indicated by genetic testing.

Concerns have been raised about the potential for DTC testing to create added costs and consume resources in the healthcare system with little value. For example, positive DTC genetic testing results may lead consumers to follow up with their physicians for treatment based on a test result that may not indicate a genuine health issue.

Barbara also provides some actionable measures that health plans can take to respond effectively to the evolving DTC genetic testing market. The following excerpt summarizes her considerations.

Continued growth in the marketplace is probable with the recent FTC approvals for DTC genetic testing and health risk reporting for diseases. Growing consumer use and subsequent follow-up with healthcare providers and insurers can be anticipated.

Data trends indicate consumers are likely to seek information perceived as helpful in self-management of health. Health plans may wish to consider how to best respond to the evolving impact of DTC genetic testing and subsequent member expectations with education, tools, and medical policy that optimize the use of these tests and support member engagement in their health.

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 ModernHealthcare.com.

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.

High-deductible/health savings account plans continue to increase

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.

Overutilization

We’ve blogged before about the relationship between healthcare costs and utilization. The topic is of interest in Pittsburgh, where facilities see utilization that exceeds national benchmarks. The Pittsburgh Post-Gazette has the story:

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.

Healthcare hot spots: The costliest city blocks in Camden, N.J.

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.