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Medicare Pays Billions for Wasteful Care

 |  By cclark@healthleadersmedia.com  
   May 14, 2014

Developing a measure to define overuse was difficult, but researchers found a way to quantify 26 types of unnecessary medical procedures administered to Medicare beneficiaries and tallied the cost.

Two measures developed by Boston-area medical researchers to quantify the extent of needless care have been used to estimate that 25% to 42% of patients over age 65 received at least one low-value, potentially unnecessary healthcare service during the study period, and many received several.

The study examined just 26 types of procedures, such as stress testing for stable coronary disease, or CT imaging for patients with headache. Based on a sample of Medicare claims for 1.36 million beneficiaries in 2009, when extrapolated to all beneficiaries, the overuse of services unlikely to help represents between $1.9 billion and $8.5 billion in spending, or between $71 and $310 per patient for that year.

"Our bottom line is that our findings are consistent with the belief that overuse is extensive," says Aaron Schwartz, a medical student at Harvard Medical School's Department of Health Care Policy and lead author of the study. The report is published in the May 12th issue of JAMA Internal Medicine.

He emphasizes that "the overspending we find here is likely the tip of the iceberg, because we're only looking at such a narrow set of these 26 services, and we know there are hundreds more low-value services out there."

Schwartz says that the study is the first to quantify the extent to which Medicare beneficiaries receive a wide variety of unnecessary procedures. Prior studies have examined only one or two types of services, such as surgery for back pain.

Regionalization Matters
Two key findings from the report involve regionalization of low-value care.

The first, Schwartz says, is that regionally, providers seem to be somewhat consistent in how much low-value care they deliver to Medicare beneficiaries. "Groups of providers who tend to provide high levels of one type of low-value service also tend to supply high levels of other types of low-value services," he says.

The second is that the difference between regions that spent the least—less than 95% of everyone else—spent $227 per beneficiary, which was not that much lower than the regions that were spending the most, $416 per beneficiary. "We saw a lot of dollars even in that low-spending group, indicating a substantial amount of overuse even in the regions with the lowest amount of overuse."

Developing a measure to define overuse was extremely difficult for the researchers because the federal claims database does not contain the reasons why patients were told to undergo the low-value services. For example, an incorrectly or poorly coded Medicare claim for a screening test might not accurately identify a patient as a high risk candidate for repeated follow-up screenings, Schwartz explains.

Curbing Overuse
One approach to stem overuse, he says, is for federal and commercial insurance plan coverage policies to either require patients to pay high co-payments or deductibles for certain services. Or, he says, "maybe you set up pay-for-performance approaches where you're rewarding physicians on how they perform on certain metrics."

Accountable care organizations and bundled payment models set up by the Centers for Medicare & Medicaid Services and other payers "incentivize lower use of overused services, but maintain provider discretion and are less likely to have unintended consequences," Schwartz says.

By quantifying the extent to which patients receive some low-value procedures, the report takes the Choosing Wisely campaign one step further.

Choosing Wisely is an initiative of the American Board of Internal Medicine, which offers guidance to doctors, hospitals, and patients, on procedures of questionable value.

A First Step
"Part of our goal is to develop a tool that can flexibly answer these questions, like how are these services changing over time. And how are these services responding to reform incentives and different guidelines," Schwartz says.

"We like to say, if you can't measure it, you can't improve it, and this is the first step in that direction, to learn the extent of overuse and what can be done about it."

In an accompanying editorial in the same issue of JAMA Internal Medicine, editors Mitchell Katz, MD; Deborah Grady, MD, and Rita Redberg, MD, wrote that the article by Schwartz, et al "is an important contribution" in the drive to measure unnecessary care," and "will ultimately spur development of interventions to reduce unnecessary care."

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