Patient engagement coupled with innovative payment models could help reduce the 21 percent of waste associated with overtreatment. Efforts to “bend the cost curve” are rightly targeted at the 5 percent of the population accounting for 50 percent of healthcare expenditures—a population that numbered about 18 million in 2011. However, contrary to conventional wisdom, these “super-users” are not a monolithic block. While the top 5 percent with chronic conditions, some of whom are at the end of life, receive most of the attention, and are the focus of the greatest amount of care process re-engineering efforts, there’s a larger segment of super-users whose costs spike for a given year due to a discrete event and then revert to a normal utilization profile.
Categories of Super-Users
All three of these groups of super-users have in one thing in common: Pairing meaningful efforts to engage each patient in planning for his or her care with the use of value- based payment approaches, such as bundles and accountable care organizations (ACOs), offers the potential of reducing unnecessary utilization. However, health plans, hospitals, and physicians will need to overcome obstacles to the broader use of such approaches.
Another key element is that patient satisfaction will increase. HFMA’s Value Project found that an essential part of a patient’s satisfaction and experience of quality care is based on respect for the patient’s needs (hfma.org/valueproject). Respect involves asking patients about their hopes and expectations for care, including engaging in open conversations with them about care alternatives and the attendant costs and benefits. This approach enables patients to decide what level of care is best for them. And it means respecting fundamental patient needs such as privacy, comfort, convenience of care, and security. Care delivery that respects the patient in these ways should lead to higher patient satisfaction. At the same time, a clear understanding of what the patient wants may help avoid costs for care that the patient would prefer not to receive.
The Problem of Overtreatment
Each of the three categories of super-users (those in the last 12 months of life, those whose costs are persistently high due to chronic illness, and those whose costs spike for a short time due to acute illness) is at increased risk for overtreatment. Overtreatment includes care that is not supported by current evidence, is driven by provider preference, and uses higher-priced services that have negligible health benefits over less-expensive alternatives. Research suggests overtreatment is the second largest category of waste (behind only administrative complexity), accounting for 21 percent of unnecessary spending in the U.S. healthcare system. Patient engagement is recognized as a key strategy for preventing overtreatment among super-users.
Most efforts to reduce overtreatment focus on strategies such as educating the patient about his or her condition and providing care navigators to help reduce unnecessary admissions to the emergency department and inpatient setting. However, efforts to engage patients in their own care planning are not as commonly used despite their potential to lower costs, improve outcomes, and ensure that care is aligned with a patient’s values.
Working with patients and their families to complete advanced directives targets overtreatment in categories of super-users who are in their last 12 months of life or have persistently high costs (e.g., multiple chronic conditions), while using patient decision-making aids has proven to be an effective strategy for patients whose care is persistently high cost or who experience discrete high-cost healthcare events.
Advanced directives. Use of advanced directives is the more common of the two patient engagement approaches mentioned above. However, it is far from a universal practice. Almost one-third of Americans 55 and older lack one. And as an individual’s level of educational attainment decreases, so does the likelihood that they have an advanced directive. Closing the gap for older individuals—particularly those with chronic conditions—could reduce overtreatment at the end of life leading to significant improvements in quality. Most (if not all) ACOs have implemented programs to increase completion of advanced directives for chronically ill patients. For organizations that have not yet entered into shared-savings/risk arrangements, pursuing tactics that increase advance directive completion is a low-risk and low-cost way to prepare for outcomes-based payment while the organization evaluates payment models and participation options.
Having a documented advanced directive has been shown to improve the quality of care for both decedents and their survivors across a range of factors. The quality of death, as reported by next-of-kin, is higher for decedents who die at home or in hospice care. It also reduces the detrimental impact on physical and mental health that caregivers experience following deaths characterized by use of aggressive end-of-life care, and it reduces the likelihood that surviving spouses will die shortly thereafter. Beyond the positive impact on quality, increasing the use of advance directives presents an opportunity to reduce unnecessary spending.
A recent study found that, in the highest-spending hospital-referral regions (HRRs), end-of-life spending for individuals with documented advanced directives was $5,585 lower than those without. Not surprisingly, the savings stemmed from lower inpatient hospital use, which was partially offset by increased hospice use and outpatient spending. Simply increasing the use of advanced directives in high-spending HRRs by six percentage points (to match the use rate in lower-spending HRRs) would reduce Medicare end-of-life expenditures by an estimated $424 million annually, according to an HFMA analysis looking at 2015 numbers. Considerably more savings would be possible if rates of advance-directive completion could be brought up to levels in better- practice areas like La Crosse, Wis.
Medicare’s move to provide payment for end-of-life discussions was a necessary first step to addressing barriers to greater use of advanced directives. However, according to a recent survey, only 14 percent of physicians have billed for the service, suggesting further obstacles. In the same survey, 66 percent of physicians cited a lack of time and 60 percent cited not being sure of when the time was right as significant barriers to end-of-life discussions.
Gundersen Health System in La Crosse, Wis., as part of its Respecting Choices program, overcomes these barriers by using trained facilitators instead of physicians to elicit patient preferences and discuss choices for end of life care.
Patient decision aids.Although the potential of advanced directives is widely recognized, the impact of such directives is limited to the 11 percent of super-users who are in the last 12 months of life in any given year. Patient decision aids, though less recognized and deployed, have the potential to have an impact on the 89 percent of high-cost individuals who are either persistent super-users or have a discrete, expensive episode. Moreover, patient decision aids could help blunt a common criticism of bundled payments, which is that, despite providing incentives for more efficient management of care within an episode, bundles do nothing to address whether the procedure was medically necessary.
Patient decision aids target care that is not aligned with patients’ wishes by helping them choose between courses of treatment for a given condition. They are particularly helpful for conditions such as lower back pain, where the value of an invasive procedure is uncertain or the procedure has not been shown to consistently produce a measurably better outcome over time than can be achieved with a conservative course of treatment.
A 2012 study published in Health Affairs reports that patients who use decision aids report feeling more engaged in their care process, experience reduced uncertainty about the decision, and have more realistic expectations for outcomes. The study found that, beyond improvements in patient experience of care, 25 percent of patients who use the tools elect not to have surgery. Reporting on the use of patient decision aids at the Seattle-based health system Group Health Cooperative (recently acquired by Kaiser Permanente), the study provides an example of their potential: 95 percent of Group Health’s members who responded to a survey said the aids helped them better understand their treatment options. As a result, hip and knee replacement surgeries decreased by 26 and 38 percent respectively after the decision aids were deployed, reducing costs for patients with osteoarthritis between 12 and 21 percent over a six-month period.
Physicians are generally supportive of using patient decision aids, with 67 percent of physicians responding to a 2012 survey reporting they believe these aids would promote better conversations with their patients. However, time and administrative constraints are common barriers to broader deployment. Instead of requiring physicians to hand out decision aids during an initial consultation, which then necessitates a second visit by the patient, Group Health addressed this challenge by using multiple mediums to distribute the decision aid as part of previsit planning.
In addition to administrative barriers, broader deployment of shared decision aids will need to overcome misaligned financial incentives that exist between purchasers and physicians. Although payment model and administrative requirements of the Medicare Shared Savings Program (MSSP) and other Medicare ACOs should support shared decision making, CMS reports that it has been difficult for physicians to integrate these tools into their workflows. To address this problem, CMS has announced a pilot program to pay selected ACOs to use these tools.
An Evolving Dynamic
Direct payment from purchasers for administering decision aids is one avenue for physicians to consider. However, it is not the only one. It may be possible to negotiate other alternatives such as relaxed preauthorization requirements or having the health plans provide the tools, thereby reducing the practice’s administrative cost.
Chad Mulvany, FHFMA, is technical director, reimbursement and regulatory issues, in HFMA’s Washington, D.C., office and a member of HFMA’s Virginia-Washington, D.C., Chapter.
Richard Gundling, FHFMA, CMA, is senior vice president, healthcare financial practices, in HFMA’s Washington, D.C., office and a member of HFMA’s Virginia-Washington, D.C., Chapter.
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