The Healthcare Imperative Lowering Costs and Improving Outcomes: Workshop Series Summary (2010) / Chapter Skim
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Appendix A: Workshop Discussion Background Paper:
Appendix A: Workshop Discussion Background Paper:
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Appendix A Workshop Discussion Background Paper Presentations and related literature summary of the estimates Prepared for The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop Series May, July, September 2009 Institute of Medicine Washington, DC This paper was prepared by Pierre Yong with the assistance of Michael Punzalan and Erin Taylor.
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THE HEALTHCARE IMPERATIVE Introduction 637 Overview of the Workshop Series 639 Understanding the Targets 640 Session 1: Unnecessary Services, 640 Session 2: Inefficiently Delivered Services, 646 Session 3: Excess Administrative Costs, 658 Session 4: Prices That Are Too High, 664 Session 5: Missed Prevention Opportunities, 673 Strategies That Work 678 Session 1: Knowledge Enhancement-Based Strategies, 678 Session 2: Care Culture and System Redesign-Based Strategies, 685 Session 3: Transparency of Cost and Performance, 697 Session 4: Payment- and Payer-Based Strategies, 704 Session 5: Community-Based and Transitional Care Strategies, 712 Session 6: Entrepreneurial Strategies and Potential Changes in the State of Play, 718 Summary Table of Estimates 738 Summing the Lower Bound Estimates 753
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Peterson Foundation, engaged in a three-part workshop series titled The Healthcare Imperative: Lowering Costs and Improving Outcomes. The goals of the series were threefold: (1)
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These variations often stemmed from differing methodologies, study time periods, sources of data, and scope of work, and made direct comparisons between estimates extremely difficult. Need for additional research As the number of national estimates identified within each category varied significantly, with several well-studied categories containing multiple estimates while other topics containing few or zero comparisons, those with few comparisons, such as transparency and retail clinics, indicate areas in need of additional research to calculate national impacts and could build on the studies of smaller scope noted throughout the report.
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Through the efforts of a planning committee consisting of leaders representing the various stakeholders throughout the healthcare sector, a series of three workshops were defined: • The first workshop, titled Understanding the Targets and convened May 21-22, explored the major drivers of healthcare spending growth, focusing on five broad categories: unnecessary services; inefficiently delivered services; excess administrative costs; prices that are too high; and missed prevention opportunities. • The second workshop, titled Strategies That Work and held July 16 17, focused on the potential of various strategies to lower health care spending while improving outcomes, including knowledge enhancement-based strategies; care culture and system redesign based strategies; transparency of cost and performance; payment and payer-based strategies; community-based and transitional care strategies; and entrepreneurial strategies and potential changes in the state of play.
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. The presenters in this session on the provision of unnecessary services focused on • Overuse of services beyond evidence-established benchmarks; • Use of services beyond benchmarks where evidence is not estab lished; and • Choice of higher-cost services over evidence-established equivalents.
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Hence, it is not certain how their estimated savings could be realized. Additional estimates Chandra and colleagues' analysis was one of the first to examine the relationship between hospital-level mortality and spending.
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discussed analyses indicating that $5.1 billion annually could be saved from a 50 percent decline in unnecessary visits for common conditions -- headaches, back pain, and benign breast conditions. Additionally, the same author estimated $6.5 billion in annual savings from reducing unnecessary MRI testing for back pain and headaches, extrapolating from their institution's experience after implementation of an evidence-based protocol.
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This section reviews estimates presented by Elliot S Fisher that calculated the potential annual savings that could be achieved within Medicare by eliminating excess use of discretionary services.
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Even if the authors' analysis suggests that savings of $50 billion or more in Medicare are achievable in principle, it does not say by what mechanism these savings can be manifested nor does it account for the costs of improving performance to the benchmarked regions. Additional estimates Based on a similar type of benchmarking analysis, Wennberg and colleagues (Wennberg et al., 2002)
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While the reasons underlying the difference remain unclear, perhaps factors other than discretionary services, such as the burden of chronic illness or the efficiency of delivery of clinical services, may have become relatively more significant drivers of Medicare spending over time. Also, as Fisher and Bronner (2009)
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Finally, the hypothesized effects of provider reimbursement and benefit design have not yet been subjected to any test. Additional estimates As Wennberg discussed in his presentation, evidence from semiquantitative studies presented in the Dartmouth Atlas suggested a 10 to 20 percent reduction in costs might be possible (O'Connor et al., 2004)
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The costs of medical errors were limited to 10 adverse events chosen via an intensive literature review. The analysis used data from the National Inpatient Sample to calculate the proportion of the population that was at risk for a particular adverse event.
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. Additional estimates Few studies have been conducted that provide national estimates of the costs associated with adverse events, and only one cost estimate was found related to the reduction of redundant radiology tests.
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Patient Safety Indicators to determine incidence of medical errors, and conducted a case-control analysis to determine the differences in lengths of stay and charges. By extrapolating from the results using a 0.5 cost-to-charge ratio, the authors estimated total national healthcare costs for the 18 medical injuries included in the study to be $4.6 billion (2000 dollars)
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in direct medical expenses is comparable to the range of costs presented by the IOM ($17 billion to $29 billion) when taking into account that less than half of the costs estimated by the IOM are due to direct medical costs and the fact that the cost estimates are for a time period approximately a decade earlier.
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estimated that interventions designed to reduce episodes of care fragmentation, including coordination of care between providers, can, on average, save 35 percent of costs for the most extreme group of uncoordinated care patients. Extrapolating these findings nationally, overall estimated national savings from a program with enabled care coordination, assuming 3 years to phase in, were an average of $240.1 billion per year, or 8.8 percent of annual national projected costs.
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estimated that chronic care management and care coordination for dually eligible Medicare and Medicaid beneficiaries could result in 10-year (2010-2019) savings of $200 billion, assuming that care coordination could yield 5 percent savings per year.
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Also of note, two of the studies in the literature, one of which was based on a randomized controlled trial, found no net savings from the implementation of care coordination programs. This is a very different outcome from the other estimates suggesting that significant savings are possible.
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Additional estimates Multiple studies have concluded that use of physician extenders is a cost-effective practice, but none offer national estimates of potential savings. Adjusted for patient case mix, it has been found that practices that more extensively used PAs and ARNPs in care delivery had lower average practitioner labor costs and total labor costs per visit (Roblin et al., 2004)
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Estimates comparison As no other national estimates for use of nonphysician providers were found, no comparison was undertaken. As described above, physician extenders have not been shown to harm clinical outcomes -- and, in fact, may improve outcomes -- and physician extenders may lower costs if used for appropriate medical conditions.
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Some limitations of the study include potential bias in the survey results owing to the low response rate from invited participants. In addition, the cost estimates may understate total physician practice costs, as the costs for inpatient care provided are not included in the analysis (Jessee, 2009)
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Additional estimates A literature search for studies examining the potential savings from increased efficiency and performance in physician offices resulted in no additional studies estimating the cost savings associated with such improvements in efficiency. However, one study was found that supported these general findings.
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. Estimates comparison The literature suggests that opportunities to increase the efficiencies within physician practices exist, however, as no other national estimates were found, a comparison was not undertaken.
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Additional estimates are also presented and compared. Estimates of excess administrative costs Kahn (2009)
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for private of current Org, applied payers only, private payers to NHE for 2009 vs. Medicare Synthesis $6-70 $32-35 As above Similar to Use of billion billion Kahn: all Casalino payers and preliminary BIR tasks ratio for physician practices
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NHE, with Assumed 10% None providers billion assumed BIR BIR, based available on physicians and hospital data Synthesis $77 $39 As above As above Use of billion billion Casalino preliminary ratio for physician practices TOTALb $168 183 billion NOTE: BIR = billing-and-insurance related; n/a = not applicable; NHE = national health expenditures; n.s. = not significant; OECD = Organisation for Economic Co-operation and Development.
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quantified the total savings opportunity in administrative costs potentially available to commercial payers. Employing a benchmarking method, the author found that if administrative expenses for fully insured (the insurance company takes the financial risk on the claims cost)
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Additional estimates Most studies providing estimates comparable to the national savings estimates provided in the papers above rely on crossnational comparisons. The work of Woolhandler and colleagues (2003)
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The presentations in this session focused on: • Hospital service prices; • Prices of medications; • Prices of durable medical equipment; and • Prices of medical devices. Hospital Service Prices Hospital consolidations may help reduce operating costs by increasing efficiency; however, consolidations may also result in increased prices.
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estimated, based on conservative assumptions, that hospital consolidations have caused an increase of approximately $10 billion to $12 billion in annual national healthcare expenditures. To reach this conclusion, Capps identified the 94 metropolitan statistical areas (MSAs)
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Finally, the analysis only provides general trends and averages, and may not reflect a specific market's price experience due to consolidation. Additional estimates A review of the literature on hospital consolidations indicated that, in general, studies found evidence of price increases after hospital mergers (Capps and Dranove, 2004; Krishnan, 2001; Krishnan and Krishnan, 2003; Vogt and Town, 2006)
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. Further complicating the question of whether prescription drug prices are too high is the fact that the supply and payment chains move differently from each other.
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Finally, studies assessing the potential share of drug use amenable to switching to generics are lacking; as a result the above estimate of a 3 percent shift is solely an example. Additional estimates A review of the literature related to prescription drug pricing and the potential savings associated with different policies yielded one national estimate and two other papers related to the comparison of U.S.
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The authors estimated annual savings to the Medicare program of $21.9 billion for the top 200 drugs used by beneficiaries after inflating the drug costs to 2006 dollars (Gellad et al., 2008)
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Prices for durable medical equipment Hoerger (2009) estimated that a reduction in Medicare reimbursements, fraud, and waste for DME could save the program $2.8 billion annually (0.1 percent of total national health expenditures in 2007)
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. Additional estimates A review of the literature found no other published studies related to the potential savings achievable by Medicare besides those already discussed.
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As Hoerger and Wynn focused on Medicare spending for DME, there may be potential for additional savings in the private health insurance market for DME. Prices of Medical Devices The medical device market in the United States is characterized by differentiated products and strong influence by medical staff on the purchasing decisions for these products.
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. Additional estimates A review of the literature related to medical devices found no other studies estimating the potential savings from lower medical device prices.
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, with primary preventive services alone yielding an estimated net savings of $7.0 billion (0.4 percent of 2006 U.S. healthcare spending)
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The author estimated that annual savings of $45 billion could be achieved through enhanced tertiary prevention.
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In the current fee-for-service payment system, many payers have no means of compensating providers for more efficient, nontraditional means of service delivery. Additional estimates The CBO reported that "although different types of preventive care have different effects on spending, the evidence suggests that for most preventive services, expanded utilization leads to higher, not lower, medical spending overall" at the federal level (Elmendorf, 2009)
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Assuming "reasonable improvements in health-related behavior and treatment," they found that "the cumulative avoidable treatment costs from now to 2023 would total a whopping $1.6 trillion" and the single-year savings in 2023 would be $217 billion in their most optimistic modeling scenario. Underuse of appropriate medications for chronic conditions has been cited as a large factor contributing to waste in disease management and tertiary prevention, with the underuse of generic antihypertensives and controller medications in pediatric asthma estimated to cost over $5.5 billion annually (Delaune and Everett, 2008)
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Significant attention has also focused on the ability of health information technology to provide clinical decision support and facilitate care coordination.
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that examined the current state of comparative effectiveness research in the United States. Cost estimates related to the use of comparative effectiveness research from other studies are then presented and discussed.
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Additional estimates A review of the literature related to comparative effectiveness research returned no peer-reviewed papers that estimated the total system savings associated with comparative effectiveness. However, several other reports were found that addressed the potential savings.
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Finally, the cost estimates from the various studies are compared. Cost savings from evidence-based care models An analysis presented by Savitz estimated $2 billion in annual savings from a targeted evidence-based clinical protocol designed to improve quality of care and reduce unnecessary admissions for febrile infants.
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Estimates comparison Although the cost estimates are not directly comparable because they address different clinical problems and protocols, the evidence suggests that evidence-based care protocols have the potential to improve quality and provide cost savings. However, while Savitz's national estimate is derived from one specific care model for febrile infants and cannot be directly compared to the estimate of savings presented by UnitedHealth Group, they are likely complementary as they address separate clinical problems.
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. With the ability to facilitate improved care coordination and reduction in medical errors, the adoption of electronic health records (EHRs)
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When combining efficiency savings with the savings associated with increased safety, the authors estimated net savings in hospital systems to be $371 billion over 15 years; in physician offices the savings could be $142 billion over the same period (Hillestad et al., 2005)
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. Estimates comparison Significant variation appears to exist in the estimates of the savings associated with the adoption of EHRs.
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The presenters in this session discussed care culture and system redesignbased strategies, including: • Caregiver profile, efficiency, and team care; • Care site efficiency and productivity initiatives and incentives; • Care site integration initiatives; • Antitrust interventions; • Promoting information technology interoperability and connectivity; • Service capacity restrictions; and • Medical liability reform. Caregiver Profile, Efficiency, and Team Care Researchers such as Smedley and Stith (2003)
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healthcare spending. By changing relative value weights and applying differential updates such that primary care would be emphasized, as well as revising payments for overvalued services, the authors found that this package of policies would "reduce national health spending, relative to currently projected levels, by an estimated $71 billion through the year 2020." Additional estimates A literature search found no comparable national estimates for use of community health workers, which is consistent with the lack of data suggested by the author and the findings of AHRQ (2009)
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Estimates comparison As no competing estimates were identified, a direct comparison cannot be made. However, the literature suggests that use of alternative caregivers has the potential to yield significant cost savings to the healthcare system.
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above, our literature review found several savings estimates directly related to efficiency initiatives. While the primary literature examining the Toyota model, Six Sigma, and lean paradigms in health care have focused on improvement in outcomes, it has been estimated that $19.4 billion in annual savings could be realized from application of lean production systems to all U.S.
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To provide national savings estimates, the authors used a model based on 1.6 percent target population savings and 45 million Medicare beneficiaries with an average annual cost of $7,000. Estimating the size of the Medicare population receiving care within an integrated delivery system as between 40 and 60 percent and the proportion of those integrated delivery systems that have the necessary information technology infrastructure as being between 30 and 50 percent, the authors calculated savings of $0.6 billion and $1.5 billion for Medicare over a 2-year period from implementation of this care delivery model targeting the highest-risk patients.
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Improving care could reduce spending among some patients by eliminating duplicated services, increasing appropriate use of specialists, and averting serious complications from chronic illnesses through better medical management, but it could also result in increases in spending for chronically ill patients who are not receiving all recommended care. Estimates comparison The potential annual savings estimate by Ferris (2009)
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In the session described below, Roger Feldman discussed the role of competition policy in restraining these prices. Potential savings from antitrust interventions Feldman (2009)
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estimates that hospital consolidations have caused an increase of approximately $10 billion to $12 billion in annual national healthcare expenditures in Section II, Session 4 is highly relevant. Estimates comparison As above, no comparison of estimates will be made.
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relied heavily on expert consensus and likely underestimated administrative costs. Additional estimates Hillestad and colleagues (2005)
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Estimates comparison As no savings estimate was provided, no comparisons could be undertaken. Medical Liability Reform Tort reform has long been a concern of practicing physicians in the United States.
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Additional estimates The maximum savings estimate that could be supported by the quantitative literature would be $90 billion, assuming the Kessler and McClellan (1996) result holds.
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However, transparency has also been touted as a potential means of enhancing competition and lowering costs. The presentation in this session discussed the potential impact of transparency on costs and outcomes, including • Transparency in prices; • Transparency in comparative value of treatment options; • Transparency in comparative value of providers; • Transparency in comparative value of hospitals and integrated systems; and • Transparency in comparative value of health plans.
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Additional estimates A search for literature related to increased transparency of healthcare prices in the United States returned no studies attempting to analyze the cost savings associated with publishing price data. Estimates comparison A comparison of cost estimates cannot be conducted for this section as there are no estimates of the potential savings from such a policy change.
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The estimates related to comparative effectiveness research are presented in Session 2 of this section. Estimates comparison As there are not any cost estimates related to the potential savings attributable to the use of cost-effectiveness research, a comparison cannot be completed at this time.
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Finally, the cost estimates from the various studies are compared. The potential for quality reporting Ginsburg (2009)
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. Additional estimates A review of the literature returned few cost estimates related to public reporting of provider quality data.
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. Additional estimates A review of the literature related to estimates of savings from public reporting initiatives yielded few results.
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Estimates comparison There is only one cost estimate for this section, and it appears that there is no consensus on the relative savings available as a result of implementing public reporting initiatives. Lindenauer (2009)
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Estimates comparison As there are no specific cost estimates related to health plan quality information, a comparison cannot be completed at this point. Session 4: Payment- and Payer-Based Strategies Strategies targeting payment models and payers have also received significant attention as a means of lowering costs and incentivizing patientcentered care.
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Results from other studies are then presented and discussed. Finally, the cost estimates from the various studies are compared.
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. Estimates comparison There are few estimates as to the overall potential national cost savings associated with changing to a payment system based on episodes of care.
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discussed the potential for health insurance exchanges as an option for lowering costs and improving quality of care in the context of the experience of Dade County, Wisconsin. Health insurance exchanges, which provide health insurance consumers with access to information related to a number of competing health plans, can address the issues of cost and quality if three conditions are present.
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When including savings to the private sector, the 10-year savings estimate jumps to $412 billion. Estimates comparison Given that only one estimate is at the national level and is for a public health insurance plan, and the other estimate focuses on premium differences among exchanges within a single state, a comparison of the cost estimates is not feasible.
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Second, the use of relative rates as a basis for calculating national savings estimates may be inappropriate if the cost savings from copayment reductions do not accrue at a constant rate. Third, payers who already set copayments at a very low level are unlikely to use VBID, and thus this estimate may overestimate the impact of VBID.
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. Estimates comparison A comparison of cost estimates cannot be conducted for value-based insurance as there currently is very little information out there on the potential national cost savings associated with such a benefit design.
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Finally, the cost estimates from the various studies are compared. The potential savings from payer harmonization and coordination Thomashauer (2009)
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Additional estimates The Commonwealth Fund (2009) estimated that a national health insurance exchange in conjunction with a public plan could offer a reduction in administrative costs of $337 billion over the next 10 years.
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Potential savings from improved care management Thorpe (2009) examined the possible benefits that could arise from improving care coordination and identified policies that could help achieve this goal.
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and that additional spending at the end of life does not buy higher-quality care (Yasaitis et al., 2009) , there is significant potential for palliative care to improve outcomes and reduce healthcare costs.
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. Additional estimates A subsequent literature review found that there is a small but growing literature on the cost-saving potential of extended palliative care on which other national estimates appear to be based.
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The two main components to the study were a comprehensive literature review of community-based prevention studies and a model that would calculate potential returns to these preventive services investments. For the literature review, the TFAH consulted with the New York Academy of Medicine and identified 84 studies of community-based programs and policy changes that could be identified as public health interventions.
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Additional estimates Although there are many evaluations of the effect of wellness programs on health and costs, it appears that the TFAH (2008) result is unique as a comprehensive national estimate of potential savings from these community-based wellness programs.
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Furthermore, while there is some overlap between the conditions targeted by community programs and primary clinical preventive services, the estimated annual savings of $16 billion from the former would likely complement the estimated savings of $7 billion from increased primary preventive services presented by Flottemesch (2009)
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Results from a literature review seeking other estimates are provided and a comparison of these estimates is made. Potential savings from clinical service engineering applications In describing the potential for variability methodology to address artificial variability in patient flow and thereby reduce healthcare expenditures, Vaswani estimated nationwide annual savings from the implementation of variability methodology as being between $35 billion and $112 billion.
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are relevant and likely complement, and potentially overlap, the estimates provided by Vaswani. Estimates comparison Given the above discussion, there are no directly comparable estimates of potential national savings.
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Finally, the analysis above ignores the potential competitive response on the part of established healthcare providers. Additional estimates A search of the peer-reviewed literature found no articles that could provide a competing national estimate of the impact of increased use of retail clinics on healthcare costs.
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. Estimates comparison Although no other national estimates of the potential savings available from use of retail clinics are available for comparison, emerging evidence indicates that use of convenience clinics is rapidly rising and may be a unique source of cost savings.
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Table A-9, below, provides details on the author's cost-savings calculations; these estimates cannot be summed as the target groups are not discrete. TABLE A-9 Examples of Crude Estimates of Cost Reductions That May Be Realizable Through Implementation of Care Coordination/Home Telehealth (CCHT)
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Estimates comparison Although the other savings estimates from Vo (2008) and Pan and colleagues (2008)
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, July 16-18, Washing ton, DC. Casale, A., R
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, July 16-18, Washington, DC. Choudhry, N
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, July 16-18, Washington, DC. Delaune, J., and W
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, May 21-22, Washington, DC. Frank, R
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, July 16-18, Washing ton, DC. Gellad, W
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, May 21-22, Wash ington, DC. Hollingsworth, B
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, July 16-18, Washington, DC.
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, May 21-22, Washington, DC. MedPAC (Medicare Payment Advisory Commission)
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, May 21-22, Washington, DC. Pittenger, K
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The Healthcare Imperative, Lowering Costs and Improving Outcomes Workshop, Washington, DC. Schoen, C., S
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The Healthcare Imperative, Lowering Costs and Improving Outcomes Workshop, Washington, DC. Sloan, F
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, July 16-18, Washington, DC. Toussaint, J
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, May 21 22, Washington, DC. Yaggy, S
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$5.1 billion annually could be saved from a 50 percent decline in unnecessary visits for common conditions -- headaches, back pain, and benign breast conditions; $6.5 billion in annual savings from reducing unnecessary MRI testing for back pain and headaches (Mecklenburg and Kaplan, 2009)
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Session 2: Inefficiently Delivered Services Medical Errors and Redundant Tests Ashish Jha $16.6 billion (2004 $17 to $29 billion in total costs (Institute of Medicine (IOM) , As Zhan and colleagues (Zhan dollars)
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$5.1 billion in annual N/A Multiple studies support findings Kaplan savings from reduction of improved quality and lower in unnecessary visits; costs from use of mid-level $6.5 billion annually practitioners, though none form unnecessary offer national savings estimates MRIs; $8.3 billion (Eibner et al., 2009; Hatem for use of lower-cost et al., 2008; Hooker, 2002; providers; $2.3 billion Roblin et al., 2004) from substituting low-cost telephone or computer-based visits for conventional visits for chronic condition Inefficiencies in Physician Offices and Hospitals William F
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(MedPAC, 2009) Session 3: Excess Administrative Costs Estimates of Excess Administrative Costs James G
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Increase in annual N/A N/A Capps national healthcare expenditures of $10 to $12 billion due to hospital consolidations Prices of Medications Jack Hoadley $9 billion in total annual $10 billion annual savings for Medicare Part D spending from Differences in estimates due savings from a 5% increased used of generics (CBO, 2008a) to the magnitude of the price across-the-board price reduction utilized in each study $21.9 billion in annual savings for Medicare Part D if prices reduction (excluding reduced to Federal Supply Schedule (Gellad et al., 2008)
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$7 billion annual $1.6 trillion between now and 2023 from prevention and early For most preventive services, Flottemesch spending reduction intervention for seven common chronic diseases (DeVol et al., many studies suggest expanded from increased primary 2007) utilization leads to higher, prevention not lower, medical spending $255 billion in savings over 11 years from reduction in tobacco overall; however, some targeted $3.3 billion annual use; $406 billion over same time period from reduction in prevention interventions have spending increase from obesity (The Commonwealth Fund, 2009)
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STRATEGIES THAT WORK Session 1: Knowledge Enhancement-Based Strategies Comparative Effectiveness Research Carolyn M N/A $480 billion over 10 years (2010-2019)
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from implementation Estimates are not directly Savitz for evidence-based of an integrated medical management program in Medicare comparable as one is based on protocol for treating and application of evidence-based standards to reimbursement savings from a single clinical febrile infants policies (UnitedHealth Group, 2009a) protocol; the other estimates saving for federal spending Electronic Health Records with Decision Support Rainu $1 to $2.7 million $77 billion in annual savings due to efficiency gains; Significant variation exists in the Kaushal annually per hospital $371 billion for hospital systems ($142 billion physician offices)
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for Pittenger from widespread more details implementation of Virginia Mason Production System Sandeep $35 to $112 billion Green annual savings from Vaswani national implementation of Variability Methodology in hospitals
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of the intervention described implementation of care in Ferris; regardless of the $175 billion in savings from patient-centered medical homes delivery model targeting approach taken, all the reviewed over ten years (Collins et al., 2009) the highest risk patients papers endorse the concept of $14.8 billion over the next decade for Medicare and Medicaid care coordination as a potential from lowering payment for potentially preventable readmissions method of improving health and within 15 days of discharge to 60 percent of the usual payment care coordination; please Owens (Berenson et al., 2009)
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Research Institute estimate far could be saved with exceeds bounds established in conventional tort reform majority of econometric research publications on this topic Session 3: Transparency of Cost and Performance Transparency in Prices John Santa N/A N/A N/A Transparency in Comparative Value of Treatment Options G Scott N/A N/A N/A Gazelle
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$2.5 to $5 billion in N/A N/A Lindenauer annual savings from public reporting requirements related to hospitals Transparency in Comparative Value of Health Plans Margaret E N/A N/A N/A O'Kane Session 4: Payment and Payer-Based Strategies Bundled and Fee-for-Episode Payments Amita $165 billion from $96.4 billion over 5 years for Medicare if shift to episode-of- Difficult to compare savings Rastogi utilization of bundled care based payments (Schoen et al., 2007)
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comparison are not possible Administrative Simplification David S $322 billion based on $337 billion in administrative savings over 10 years due to a Estimates are not directly Wichmann application of technology national health insurance exchange with a public plan option comparable due to targeting of to administrative (The Commonwealth Fund, 2009)
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estimate difficult to compare given decade long estimate Wellness and Community Programs Jeffrey Levi $16 billion in annual $7 billion in annual savings from increased primary preventive Estimates not directly savings within five years services (Flottemesch, 2009)
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Marcus $2 to $7.5 billion in N/A Multiple studies support findings Thygeson annual savings from of improved quality and lower increased utilization of costs from use of retail clinics, retail clinics though none offer national savings estimates (Eibner et al., 2009; Mehrotra et al., 2009) Technological Innovation Adam $1.7 billion in annual $3.6 billion in savings from national implementation of Estimates not directly Darkins cost savings from telehealth technology (Vo, 2008)
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• What additional research is needed to identify the specific, action able interventions and the steps needed to achieve net savings?
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• Overuse: services beyond evidence-established levels • Discretionary use beyond benchmarks – Defensive medicine • Unnecessary choice of higher cost services INEFFICIENTLY DELIVERED SERVICES Total excess = $130 B* • Mistakes -- medical errors, preventable complications • Care fragmentation • Unnecessary use of higher cost providers • Operational inefficiencies at care delivery sites – Physician offices – Hospitals EXCESS ADMINISTRATIVE COSTS Total excess = $190 B*
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Key Terms
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