It has been well-documented that regional differences in Medicare spending persist. From 2007 to 2009 Medicare spent 1.43 times more on the average patient in geographic regions at the top 10th cost percentile than it did for patients in the 90th percentile. This was even after controlling for variations in wages and cost of living. Congress has asked the Institute of Medicine (IOM) to convene a committee to look into this issue and make policy recommendations. Dr Joseph Newhouse and Dr. Alan Garber, chair and vice-chair of that committee recently published an article describing their progress in the New England Journal of Medicine. After reviewing the literature, and commissioning studies of their own, they have made some preliminary findings.
The Takeaway
1) Post-acute care, that is skilled nursing facilities, home health aids, rehabilitation facilities, long-term care and hospices accounted for most of the variation in spending. In Miami, Medicare reimbursements for post-acute care are over four times the national average, so far off the scale that it actually suggests fraud.
2) The second type of health service that varied significantly is hospital inpatient services, including physician reimbursements.
3) Spending on all other categories: prescription drugs, emergency care and ambulances, outpatient procedures, diagnostic testing varied only slightly.
4) Comparing spending rates at individual hospital service areas (HSAs) within the larger regional market showed that there was considerable variation among hospitals in the same area.
5) When the committee looked at spending rates for different medical conditions within market areas, it also found little uniformity. Points four and five suggest that it is physician culture within specialties that dictates the aggressiveness of treatment within a region, not patient health status.
6) There was little correlation between regional spending and quality indicators.
The committee's actual policy recommendations will come out this summer. From what they have learned so far, it looks like those recommendations will focus on trying to change individual provider behavior rather than region-wide activity.
TL:DR Medicare is going to have to clamp down on higher-than-average spending in post-acute care facilities and in-patient hospital services if they want to substantially control costs.
Read the article: Geographic Variation in Medicare Services (free)
By Joseph P. Newhouse, Ph.D., and Alan Garber, M.D., Ph.D.
Monday, April 29, 2013
Tuesday, April 23, 2013
What Behavioral Economics Has to Teach Us About Reining in Health Care Costs
"As the crisis of cost containment becomes ever more pressing we need to explore all possibilities."
The Takeaway
Dominic King, a clinical lecturer at Imperial College London, and coauthors study behavioral change and its application to health care policy. Their recent article, published in Health Affairs last month, recaps a watershed report on behavioral economics originally produced for the UK government. After reviewing the current research and interviewing key scientists and policy makers, they identified nine aspects of human behavior that policy makers should pay attention to in the effort to slow spending.
1) Source Credibility: Physicians have been shown to believe information from their own professional organizations more readily than the same information from insurance companies. Parents have been shown to heed vaccine advice from their child's pediatricians more readily than the same advice from government officials. Send messages from appropriate sources.
2) Incentives: People are "loss averse" and respond better to the fear of loss than the hope of reward. Awareness of this cognitive bias has been successfully applied to medication adherence and weight loss programs.
3) Norms: Peer group norms are powerful influences on behavior but they can be mispercieved. Alcohol consumption, for instance, was reduced in one study when educators communicated the actual norms of college drinking to students. They had believed that their peers were drinking much more than they actually were.
4) Defaults: At Vanderbilt University Medical Center setting an electronic prescription default to a generic drug worked better than traditional educational campaigns to get physicians to prescribe generic drugs.
5) Salience: Having salient cost information available to physicians has been shown to decrease the costs of the tests they prescribe.
6) Priming: Environmental factors have significant impacts on choices. Studies find, for example, that children exposed to food advertisements consumed 45 percent more calories than those who weren't exposed. Even simple environmental cues like larger plates increase food consumption.
7) Affect: Emotions play an important role in guiding our decisions. Asking patients to make important treatment decisions too soon after hearing bad news risks putting them at risk for a response based on transient fear, anxiety, and/or pain, rather a full assessment of the benefits and consequences.
8) Commitments: Self-commitment devices such as pre-paid gym memberships help people boost their willpower. Smoking cessation programs have used this technique with success by having quitters put money into a savings account which is only returned to them if they pass a nicotine-detecting urine test after six months.
9) Ego: Status among our peers is important to us. Hospitals that do better a providing high-quality, cost-effective services should have their performance publicized and recognized.
The One Minute Summary
Behavioral economics goes beyond the traditional assumption that we are all rational creatures who reliably make choices in our own best interests. Drawing on psychological research, it looks at the full set of drivers affecting our behavior. Often these are unconscious emotions, biases, preconceptions and tendencies. These ideas have already begun to be applied to patient safety efforts, but they could be more widely employed. The authors point out that ethical considerations, making sure that these levers are used to enhance people's critical choice-making rather than reduce it, are crucially important.
Read the Study: Approaches Based On Behavioral Economics Could Help Nudge Patients And Providers Toward Lower Health Spending Growth
By: Dominic King, Felix Greaves, Ivo Vlaev and Ara Darzi
The Takeaway
Dominic King, a clinical lecturer at Imperial College London, and coauthors study behavioral change and its application to health care policy. Their recent article, published in Health Affairs last month, recaps a watershed report on behavioral economics originally produced for the UK government. After reviewing the current research and interviewing key scientists and policy makers, they identified nine aspects of human behavior that policy makers should pay attention to in the effort to slow spending.
1) Source Credibility: Physicians have been shown to believe information from their own professional organizations more readily than the same information from insurance companies. Parents have been shown to heed vaccine advice from their child's pediatricians more readily than the same advice from government officials. Send messages from appropriate sources.
2) Incentives: People are "loss averse" and respond better to the fear of loss than the hope of reward. Awareness of this cognitive bias has been successfully applied to medication adherence and weight loss programs.
3) Norms: Peer group norms are powerful influences on behavior but they can be mispercieved. Alcohol consumption, for instance, was reduced in one study when educators communicated the actual norms of college drinking to students. They had believed that their peers were drinking much more than they actually were.
4) Defaults: At Vanderbilt University Medical Center setting an electronic prescription default to a generic drug worked better than traditional educational campaigns to get physicians to prescribe generic drugs.
5) Salience: Having salient cost information available to physicians has been shown to decrease the costs of the tests they prescribe.
6) Priming: Environmental factors have significant impacts on choices. Studies find, for example, that children exposed to food advertisements consumed 45 percent more calories than those who weren't exposed. Even simple environmental cues like larger plates increase food consumption.
7) Affect: Emotions play an important role in guiding our decisions. Asking patients to make important treatment decisions too soon after hearing bad news risks putting them at risk for a response based on transient fear, anxiety, and/or pain, rather a full assessment of the benefits and consequences.
8) Commitments: Self-commitment devices such as pre-paid gym memberships help people boost their willpower. Smoking cessation programs have used this technique with success by having quitters put money into a savings account which is only returned to them if they pass a nicotine-detecting urine test after six months.
9) Ego: Status among our peers is important to us. Hospitals that do better a providing high-quality, cost-effective services should have their performance publicized and recognized.
The One Minute Summary
Behavioral economics goes beyond the traditional assumption that we are all rational creatures who reliably make choices in our own best interests. Drawing on psychological research, it looks at the full set of drivers affecting our behavior. Often these are unconscious emotions, biases, preconceptions and tendencies. These ideas have already begun to be applied to patient safety efforts, but they could be more widely employed. The authors point out that ethical considerations, making sure that these levers are used to enhance people's critical choice-making rather than reduce it, are crucially important.
Read the Study: Approaches Based On Behavioral Economics Could Help Nudge Patients And Providers Toward Lower Health Spending Growth
By: Dominic King, Felix Greaves, Ivo Vlaev and Ara Darzi
Sunday, April 14, 2013
A Review of Studies Looking at Hospital Readmissions and ER Visits After Discharge Finds No Clear Path Out of the Woods
The Takeaway
1. Stephanie Rennke, MD at UCSF Medical Center led a team funded by the U.S. Department of Health and Human Services that reviewed studies on hospital-based interventions to reduce adverse events after discharge for medical patients. The results were published in the Annals of Internal Medicine on March 5.
2. Of 20, 248 studies published between 1990 and 2012, they were able to find 47 that looked solely at the general adult medical population to determine the effect of transitional care strategies on postdischarge emergency department use, hospital readmission or a combination of both.
3. The complexity of the intervention process and the variety of settings in which it has to be applied has meant that no clear single strategy has yet emerged that hospitals can be sure will reduce 30-day readmissions.
4. A number of institutions have had promising results using a "dedicated transition provider," (generally a nurse or a clinical pharmacist) who had primary responsibility for managing the discharge and follow-up process.
5. Project Red, which used a nurse discharge advocate in an urban "safety net hospital," and Care Transitions Intervention (CTI), which used a transition coach, were among the programs that did show significant reductions in adverse events 30 days post discharge. CTI was the only intervention that has already been scaled up to different types of hospitals and health care systems, and found effective.
6. The overall body of evidence is too weak so far to know how different interventions will perform in different organizations, each with their own safety and quality improvement cultures. Nor do we yet know which interventions will best scale-up for wider implementation across the country.
7. The financial onus is already on hospitals to reduce hospital readmission rates but in terms of evidence-based research, we are still in the stage of identifying best practices.
The One Minute Summary
With 20 percent of medical patients returning to the hospital or emergency department within 30 days after being released, reducing adverse events after discharge has become a priority for policy makers. The Partnership for Patients, a government/industry joint effort to increase patient safety and improve care, has identified hospital readmissions as one of its key focus areas. They are using a carrot and stick approach. The carrot is that under the Affordable Care Act, the Dept of Health and Human Services has been provided with $218 million to create Hospital Engagement Networks to identify best practices and help spread them across the health care industry. The stick is that the Centers for Medicare and Medicaid will now begin to reduce payments to hospitals that don't reach their targets.
In this context we should expect to see a lot of attention being paid to the problem of reducing readmissions, and a lot of fresh studies being published. Much of what has been done so far has focused on patients with specific diseases such as diabetes, asthma and heart disease. It is only logical that complex systems like hospitals should focus first on more easily defined groups. The results of those studies were excluded from this review because they wanted to see what has been applied to general medical population. The authors were not able to find much, nor would one expect them to. We are still in early days yet.
The good news is that interventions that begin in the hospital with patient education and review of medication changes, and are then "bridged" afterwards with follow-up phone calls, home visits or both, did reduce ED visits and readmissions by a significant amount. The bad news is that the effect was weak because the studies were too difficult to compare with one another. No standard way to measure results has yet been agreed on that can allow researchers in different health care settings, delivery systems, and communities to compare data. When this is developed policy makers will be able to ask the most pressing question: have these interventions been able to lower costs?
TL:DR "Bridging strategies" using nurse coaches, pharmacists or some other type of dedicated transition providers did reduce 30-day hospital readmissions in some cases. It's too soon to tell if this will be scalable or if it will save money.
Read the Study: Hospital-Initiated Care Interventions as a Patient Safety Strategy
By Stephanie Rennke, MD; Oanh Nguyen, MD; Marwa Shoeb, MD; Yimdriuska Magan, BS; Robert Wachter, MD and Sumant Ranji, MD.
The Takeaway
1. Stephanie Rennke, MD at UCSF Medical Center led a team funded by the U.S. Department of Health and Human Services that reviewed studies on hospital-based interventions to reduce adverse events after discharge for medical patients. The results were published in the Annals of Internal Medicine on March 5.
2. Of 20, 248 studies published between 1990 and 2012, they were able to find 47 that looked solely at the general adult medical population to determine the effect of transitional care strategies on postdischarge emergency department use, hospital readmission or a combination of both.
3. The complexity of the intervention process and the variety of settings in which it has to be applied has meant that no clear single strategy has yet emerged that hospitals can be sure will reduce 30-day readmissions.
4. A number of institutions have had promising results using a "dedicated transition provider," (generally a nurse or a clinical pharmacist) who had primary responsibility for managing the discharge and follow-up process.
5. Project Red, which used a nurse discharge advocate in an urban "safety net hospital," and Care Transitions Intervention (CTI), which used a transition coach, were among the programs that did show significant reductions in adverse events 30 days post discharge. CTI was the only intervention that has already been scaled up to different types of hospitals and health care systems, and found effective.
6. The overall body of evidence is too weak so far to know how different interventions will perform in different organizations, each with their own safety and quality improvement cultures. Nor do we yet know which interventions will best scale-up for wider implementation across the country.
7. The financial onus is already on hospitals to reduce hospital readmission rates but in terms of evidence-based research, we are still in the stage of identifying best practices.
The One Minute Summary
With 20 percent of medical patients returning to the hospital or emergency department within 30 days after being released, reducing adverse events after discharge has become a priority for policy makers. The Partnership for Patients, a government/industry joint effort to increase patient safety and improve care, has identified hospital readmissions as one of its key focus areas. They are using a carrot and stick approach. The carrot is that under the Affordable Care Act, the Dept of Health and Human Services has been provided with $218 million to create Hospital Engagement Networks to identify best practices and help spread them across the health care industry. The stick is that the Centers for Medicare and Medicaid will now begin to reduce payments to hospitals that don't reach their targets.
In this context we should expect to see a lot of attention being paid to the problem of reducing readmissions, and a lot of fresh studies being published. Much of what has been done so far has focused on patients with specific diseases such as diabetes, asthma and heart disease. It is only logical that complex systems like hospitals should focus first on more easily defined groups. The results of those studies were excluded from this review because they wanted to see what has been applied to general medical population. The authors were not able to find much, nor would one expect them to. We are still in early days yet.
The good news is that interventions that begin in the hospital with patient education and review of medication changes, and are then "bridged" afterwards with follow-up phone calls, home visits or both, did reduce ED visits and readmissions by a significant amount. The bad news is that the effect was weak because the studies were too difficult to compare with one another. No standard way to measure results has yet been agreed on that can allow researchers in different health care settings, delivery systems, and communities to compare data. When this is developed policy makers will be able to ask the most pressing question: have these interventions been able to lower costs?
TL:DR "Bridging strategies" using nurse coaches, pharmacists or some other type of dedicated transition providers did reduce 30-day hospital readmissions in some cases. It's too soon to tell if this will be scalable or if it will save money.
Read the Study: Hospital-Initiated Care Interventions as a Patient Safety Strategy
By Stephanie Rennke, MD; Oanh Nguyen, MD; Marwa Shoeb, MD; Yimdriuska Magan, BS; Robert Wachter, MD and Sumant Ranji, MD.
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