Unbiased Analysis of Today's Healthcare Issues

How to reduce spending on unnecessary care (the answer is not what you think)

Written By: Jason Shafrin - Oct• 09•17

The way to solve this question is easy, right?  The first step is to define what constitutes unnecessary care.  Then identify the highest cost manifestations of unnecessary care.  Then, create interventions that stop providers from providing this care.  Simple, right?

Maybe not according to a paper by Mafi et al. (2017).  The authors appear to follow the formula above.  They define unnecessary care based on guidelines from ABIM Foundation’s Choosing Wisely campaign, the US Preventive Services Task Force, HEDIS measures and clinical guidelines.  The measure cost using 2014 data from the Virginia All Payers Claims Database.  With these data, rather than finding that the highest cost services contribute most to overall spending on unnecessary, they find that low cost unnecessary care makes up the lion share of health care spending on unnecessary services.

…we determined that 93 percent of services used were low cost ($100–$538 per service) and very low cost (less than $100) low-value services, compared to 7 percent that were high cost ($539–$1,315) and very high cost (more than $1,315) low-value services…The total cost for low- and very low-cost services was nearly twice the total cost for high- and very-high-cost services (65 percent versus 35 percent).

The authors find that if you had an intervention that would eliminate all unnecessary high-cost care, you would save $205 million.  If you would eliminate al low- and very-low-cost unnecessary care, on the other hand, you would save $381 million.

Note that the study only uses 44 unnecessary services.  Further, it is likely that there is some bias as the low-cost unnecessary interventions were likely only included in the clinical guidelines because they are widely used.   Thus, while it may or may not be the case that low-cost unnecessary care is the key area to target, it is clear that low cost, frequently used unnecessary care should not be ignored even though their high-cost brethren often get the most media attention.

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