Low-Value Care Spending Slows as Medicare Pushes Value-Based Care

Low-value care spending among fee-for-service Medicare recipients dropped slightly from 2014 to 2018. However, two of the three services that make up the majority of low-value healthcare spending, antibiotic and opioid prescriptions, increased despite a national campaign to promote value-based care, according to a new RAND Corporation study.

The researchers analyzed healthcare data of more than 21 million patients enrolled in traditional fee-for-service Medicare from 2014 to 2018, ultimately finding that the percentage of participants receiving low-value care decreased by 3 percent, or from 36.3 percent in 2014 to 33.6 percent in 2018.  

"Our study highlights several promising opportunities for targeted interventions that may reduce wasteful health care spending while improving the quality of care," John N. Mafi, the study's lead author and an adjunct physician policy researcher at RAND, said in a statement.

"Given mushrooming deficits and the fact that the Medicare trust fund is running out of cash, there will be enormous pressure to find ways to trim spending in the Medicare program and making significant progress in reducing low value care needs to be a top priority," said Mafi, who also is an assistant professor of medicine at the David Geffen School of Medicine at UCLA.

An estimated 10 to 20 percent of healthcare spending consists of low-value care, defined as patient services that provide no net clinical benefit in specific scenarios.

The RAND study revealed that two-thirds of low-value care spending went towards three services: opioids prescribed for back pain, antibiotics prescribed for upper respiratory infections, and preoperative laboratory testing.

During the study period, preoperative laboratory testing rates among Medicare beneficiaries dropped.

However, prescribing opioids for acute back pain increased, despite growing awareness of the harm the drugs can cause and the role prescribing them plays in the country’s opioid crisis. Per 1,000 Medicare beneficiaries, approximately 154 were prescribed opioids for back pain in 2014 compared to approximately 182 getting an opioid in 2018.

Antibiotic prescriptions for upper respiratory infections also increased, with 75 people receiving this service in 2014 compared to 82 in 2018 per 1,000 Medicare beneficiaries. Ironically, this increase comes alongside the strong evidence on the treatment’s lack of benefit and the overall rise in antibiotic stewardship and focus on appropriate prescribing practices.

"In the midst of ongoing antibiotic overuse and an opioid overdoes crisis, our findings highlight worrisome trends and underscore an urgent need to improve the quality and safety of care delivered to individuals with Medicare," Mafi said.

Low-value care results in higher costs for both patients and payers. What’s more, low-value care is associated with poor patient outcomes. For example, about 1 in every 1,000 antibiotic prescriptions is associated with complications that require patients to visit hospital emergency departments.

The study suggests that policymakers continue to educate physicians and patients on the problems low-value services present. Additionally, policymakers should continue with payment reforms that promote value-based care, such as capitation.

“Capitated payment models and accountable care organizations (ACOs) comprise an important strategy that may incentivize clinicians to reduce low-value care use across a broad range of clinical arenas,” the report authors wrote.

“Most likely, a combination of capitated payment models combined with physician engagement and culture change, alongside the implementation of seamless EHR CDS tools, may have the greatest chance of success in eliminating low-value care,” they continued.

In addition, the report authors explained that executives should leverage computer-based decision-support tools to encourage the reduction of low-value care.