Commercial Payer Spent $5.5B on Low-Value Care Services

Nearly $5.5 billion was spent on 20 low-value care services in 2015, according to an analysis of health care claims from the Research Consortium for Health Care Value Assessment.

The analysis, funded by the PhRMA Foundation’s Value Assessment Initiative, uncovered that the prevalence of low-value care was widespread, which supports prior research that suggests this is a major issue in the industry.

Researchers used coded algorithms developed by a team at Anthem to examine the prevalence of low-value care among privately insured patients. Researchers included 20 low-value care services identified primarily from Choosing Wisely, a campaign that aims to reduce the utilization of services of little to no value. The data set contained complete medical and pharmaceutical claims for over 10 million members, representing enrollees from all 50 states and Washington D and accounting for at least 5 percent of the privately insured population in nearly half of the states.

Researchers found that the prevalence of low-value care was worse in some states. Low-value care in the worst states was over twice as frequent. Some states exceeded 20 percent of members with at least one low-value care service. Specifically, 22 percent of members in the prevalent states of Florida, New Jersey, North Carolina, New York, and Alabama, received low-value care services. 

However, the states with the lowest rates of low-value care utilization still had nearly 10 percent of its members receive at least one low-value care service during the study year.

The geographical trends showed that states in the Midwest and West of the US were more likely to have lower rates of low-value care than those states in the Southeast and Northeast. This may have something to do with the difference between rural and urban areas, researchers explained.

The cost of the 20 low-value care services across states for the privately-insured population ranged from $12 to $32 per member per year.

The most common costly services were annual cervical cytology screening for women aged 30 to 65 years, routine population-based Vitamin D testing, the use of several specific branded drugs when generics were unavailable, and antibiotics for colds. The largest variation from state to state was with Vitamin D testing and cytology screening. 

All four of these procedures cost over $480 million individually. 

Key drivers of low-value care may be provider adherence to revised professional guidelines, unintentional perpetuation of low-value care because of administrative practices, and patient preferences or lack of education, the analysis highlighted.

The variation in the study uncovered that even in the states that are performing “better,” low-value care is still happening far too often. But a reduction in low-value care is possible if rates of care provided in some states are less than half of that in others. 

In order to meaningfully address low-value care, incentives among provider behavior systems and patient behavior must be aligned, researchers stated. 

The challenges that low-value care brought in 2015 are still relevant today, including driving up healthcare costs and putting providers at risk under value-based reimbursement models. 

Nearly 65 percent of physicians agreed that up to 30 percent of medical care is unnecessary and another 27 percent thought up to 45 percent was not needed, according to a 2018 survey.

One of the most successfully known campaigns tackling low-value care is the American Board of Internal Medicine (ABIM) Foundation’s Choosing Wisely initiative. This initiative provokes a discussion about preventing unnecessary tests and treatments and asks for any recommendations experts may have on the topic. 

Since 2010, the initiative has had more success in driving down low-value care than patient-centered medical home certification status, value-based insurance participation, and accountable care organization participation.

Clinical decision tools are also a way to avoid low-value care. Cedars-Sinai Medical Center implemented a clinical decision support tool in its EHR system to educate clinicians on care value. The tool informs clinicians on what would register as low-value care by sub-specialty societies or peer-reviewed literature before they attempt to treat a patient. 

Provider organizations should also look to enhance patient engagement to decrease low-value care. Nearly 59 percent of physicians reported that patient pressure led to overtreatment, and the belief that more healthcare is better care was a major factor that contributed to low-value care services, according to a PlosONE survey. 

Addressing how to improve clinician and patient interaction at the point-of-care will significantly enhance patient engagement and reduce overuse. The AHA also suggested to increase communication over telephone and email. Providers should also ask the patient to complete a values clarification exercise to understand the involvement that the patient would prefer in the situation.