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More Arrows Out of the Cost Management Quiver?

By Kim Bellard, May 31, 2013

Even as health costs seem to have dramatically slowed in recent years, some recent studies now question whether some commonly proposed methods of attacking those costs – reducing geographic practice variations, increasing patient shared-decision-making, and employee wellness programs -- actually have the potential that proponents have claimed. 

Let’s start with the geographic practice variations.  It’s been over thirty years since Jack Wennberg first mapped out the sometimes startling variations in health care costs and utilization.  The Dartmouth Atlas has continued and expanded on his work, and it has become almost dogma that such variations exist.  The belief has been that they could account for as much as 30% of care that is inefficient/unnecessary, which could be cut without harming patient safety.  Respected experts like Atul Gawande have written eloquently on these variations, and then-CBO head Peter Orszag popularized the idea to the extent that President Obama seized upon it in his campaign to pass the Affordable Care Act.  Turns out the conventional wisdom may be wrong.

New research from Jack Reschovshy and his colleagues indicates that health status, not geographic practice variations, drive 75-85% of apparent geographic cost variations.  They took a new approach to case mix adjustments and concluded that, for the most part, higher cost patients were, indeed, sicker.  The researchers took pains to note that their conclusion is not to suggest that significant waste and inefficiency do not exist in our health care system, but simply that those are not easily boiled down to geographic practice variations.

I’m not sure how this research squares with, say, the differences in hysterectomies or C-sections that have long been known, but, to be fair, the researchers did only focus on the Medicare population.

Then there is patient shared-decision-making.  This is at the heart of consumer-driven plans, with the belief that once patients are more involved in their care, and more exposed to the costs and trade-offs inherent in that care, they will become more prudent purchasers.  The latest issue of JAMA Internal Medicine included several studies and articles on this topic – one of which, a study by Tak and colleagues, throws cold water on the idea of SDM saving money.  They found that while over 70% of patients preferred to leave decision-making to their physician, patients who did actively participate in that decision-making had longer hospital lengths of stay and costs (the study only focused on hospital patients). 

One could easily see how more vocal patients might demand more care, or we can speculate that these patients became more involved in their decision-making because they were sicker.  Correlation is not, after all, causation.  We should also keep in mind that Tak’s results are somewhat at odds with recent research by Hibbert that suggested higher patient activation predicts lower costs.  As researchers always like to say, more research is needed. 

It’s not good days for SDM.  Another of the JAMA Internal Medicine studies, by Fowler et alia., was a nationwide survey of adults 40 years or older on their experiences with being involved in medical decision-making.  Patients reported more discussion of pros than cons, and more balanced discussion about surgeries than cancer screenings or medication treatment.  The authors conclude that “discussions about these common tests, medications, and procedures as reported by patients do not reflect a high level of shared decision making.”  A third study, by Wachterman and colleagues, found a lack of congruence between expectations of hemodialysis patients and their nephrologists, with the patients being much more optimistic about their prognosis, and conclude better communication is needed. 

A fourth study, by Krumholz, surveyed patients with Acute Myocardial Infarction, and found that over two-thirds wanted active involvement in decision-making, but the authors admit that “…shared decision-making is not yet integrated into routine medical care.” 

Face it: the winners in the health care system have been hospital systems and pharmaceutical companies.  These are important institutions, which employ many caring and well-intentioned people, but whose historical orientation is treating sick people – the sicker the better.  As comedian Chris Rock puts it, “Ain’t no money in the cure, money’s in the medicine.” 

Hospitals are consolidating and buying up physician practices at record rates in order to improve their clinical integration – or improve market clout – and the pharmaceutical industry has been off to the races ever since DTC advertising has been allowed.  As proof, consider the fact that Americans take, on average, 4 billion prescriptions per year.  That’s 13 prescriptions per year for each and every one of us, and many of those are for “lifestyle conditions” that arguably could largely be avoided if we simply ate better and got more exercise. The answer may be less in changing what we do to sick people than in simply having more healthy people. 

That is one reason why many employers have instituted employee wellness programs.  According to Aon Hewitt, 83% of large and mid-sized firms have some employee incentives in place to help them be more active in maintaining their health.  ACA not only permits such programs but expands how much they can incent employers.  Under new rules, employees will be able to reduce their health insurance contributions by up to 30% -- up to 50% if smoking cessation is included – by participating in such programs.   The oft-cited success story in employee wellness programs is that of J&J, which was so happy with its success that it turned the programs into a business line, part of the $6 billion wellness industry. 

However, even the success of wellness programs is not quite clear-cut.  Reuters reports that a recent report from RAND to DOL and HHS found at best only modest successes – and the report was mysteriously pulled from public availability within hours of its release.  Looks like some other people have some explaining to do…

Sometimes it seems like we really don’t know anything, or that the things we thought we knew aren’t true.  For example, for decades the gold standard for treatment of appendicitis was an appendectomy; now it appears that surgery may not be called for at all, with antibiotics doing the trick.  And doing even get me started on the controversies about cancer screenings, like PSA tests.

I wonder if years from now we’ll look back on this age of medicine much like we might regard medicine of the 19th century: well-intentioned but almost comically primitive in its misguided notions about how to treat conditions.  E.g., maybe the future is in the microbiome rather than in our prescription medicines and surgical approaches.  No one can tell me that any clinical studies for a given drug are truly taking into account the other 12 prescriptions a user might also be taking, nor fully take into account what havoc the cocktail of prescription drugs will have on the body’s natural defenses. 

We are starting to realize the importance of our internal bacteria, but we still don’t really know exactly what they do or how we can take best advantage of them.  Then again, we’ve been studying geographic practice variations, shared-decision-making, and employee wellness programs for a long time, and we don’t seem to know as much about them as we thought we did either.  Based on these new studies, there are a lot of consultants, disease management companies, and wellness firms that may have a lot of explaining to do.  

When push comes to shove, I still believe that there are unnecessary practice variations, that getting patients more involved in decision-making is the right thing to do, and that efforts to focus on health rather than on illness are the way to go.  Whether we know how to do any of those correctly, though, is an open question.

Reader Comments (1)

In case anyone is interested, here is Dartmouth's rebuttal to the Reschovshy study:

May 31, 2013 | Unregistered CommenterKim

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