According to
PriceWaterhouseCoopers (PwC) Spending can be classified into three waste
“baskets”: behavioral, clinical and operational. These baskets cross all of the
health sectors and include consumers, government and industry. The top three areas of wasted spending are
defensive medicine ($210 billion annually), inefficient claims processing (up
to $210 billion annually), and care spent on preventable conditions related to
obesity and overweight ($200 billion annually). (PwC 2008)
Clinical Waste
What is Clinical Waste?
According to PricewaterhouseCoopers (PWC)
article The Price of Excess Identifying waste in healthcare spending
Clinical waste is” where medical care itself is considered inappropriate,
entailing overuse, misuse, or under-use of particular interventions, missed
opportunities for earlier interventions, and overt errors leading to quality
problems for the patient, plus cost and rework.” (PWC 2008)
Defensive medicine is
defined as the ordering of treatments, tests and procedures primarily to help
protect the physician from liability rather than to substantially further the
patients diagnosis or treatment While perhaps not “unnecessary care, defensive
medicine is meant more to offer economic
and psychological benefit to the physician than to the patient (Hermer
2010) According to a recent national physicians’ survey by Jackson Healthcare,
the nation’s third largest healthcare staffing agency, 75% of doctors say that
they order more tests, procedures and medicines than are medically necessary in
an attempt to avoid lawsuits. (Scherz 2013)
According to Forbes
magazine:
A middle aged man enters the emergency
room with chest pains. The attending physician diagnoses the patient with
indigestion. The physician wants the patient to change his diet, take
medication and go home. Due a worried look on the faces of the patient and
wife, the doctor has second thoughts.
Despite the
doctors conviction that the diagnosis is
correct, the physician orders a battery of tests to rule out a heart attack,
and everything is normal. This is defensive medicine.
(Scherz 2013)
According to Healthcare
Finance News there was an interview of 462 physicians, and the doctors believed
that 26% of overall healthcare expenses could be attributed to defensive
medicine. Nearly 3 out of 4 respondents said they practiced some form of defensive
medicine in the past 12 months. In 2010 dollars, such lawsuit-inspired medicine
may have cost the nation $650 billion. The article goes on to highlight that
the threat of lawsuits drives defensive medicine, an analysis published in the
August issue of Health Affairs suggests that physicians’ fear of a lawsuit may
overshadow their actual risk of being sued.
Researchers tried to find a correlation between physicians’ propensity
to order tests with the actual risk of a malpractice lawsuit as measured by award
caps and a risk index based on how many malpractice claims were filed and award
amounts they did not find one. This means that the doctors ordering additional
test was not based upon the relative threat of being sued but rather the fear
of being sued. (Cerrato 2013)
According to another article
in Healthcare Finance News a report from advocacy group Public Citizen shows
the results of an analysis of data from the federal government’s
National Practitioner Data
Bank, which has tracked malpractice payments since 1990 found the following:
(Irving 2013)
·
The
number of malpractice payments on behalf of doctors (9,379) was the lowest on
record in 2012, falling for the ninth consecutive year.
·
The
value of payments made on behalf of doctors ($3.1 billion) was the lowest on
record if adjusted for inflation. In unadjusted dollars, payments were at their
lowest level since 1998.
·
More
than four-fifths of medical malpractice awards compensated for death,
catastrophic harm or serious permanent injuries.
·
Medical
malpractice payments’ share of the nation’s healthcare bill was the lowest on
record, falling to about one-tenth of 1 percent (0.11 percent) of national
healthcare costs.
·
Medical
liability insurance premiums, which takes into account defense litigation costs
and other factors as well as actual payments, fell to 0.36 of 1 percent of
healthcare costs, the lowest level in the past decade. (Lincoln 2013)
According to the New England Journal of
Medicine article Claims, Errors, Compensation Payments in Medical Malpractice
Litigation reviewed a random sample of 1452 closed malpractice claims from five
liability insurers to determine whether it was due to medical error. The result
was that claims involving errors accounted for 78 percent of total
administrative costs. (Studdert 2009)
Preventable Readmissions Is
another category of clinical waste.
Hospital readmission rates have been
proposed as an important indicator of quality of care according to an article
in Health Care Financing Review a readmission may result from actions taken or
omitted during the initial hospital stay. A readmission may result from
incomplete treatment or poor care of the underlying problem or poor
coordination of services at the time of discharge and afterwards, such as
incomplete discharge planning and or inadequate access to care. (Goldfield
2008)
According to Health Affairs
magazine article titled Reducing Hospital Readmissions: It’s About Improving
Patient Care the CMS paid $17.8 billion a year on patients whose return trips
to the hospital could have been avoided.
(Ness 2013) Statistics also show that about one in five patients
discharged from a hospital are readmitted within 30 days. Medicare Payment
Payment Advisory Commission concluded that about three-quarters of readmissions
within 30 days were potentially preventable. (James 2013) According to the Article one program has had
some success in reducing readmission rates is Project BOOST (Better Outcomes by
Optimizing Safe Transitions) Some of the
procedures are:
·
Medication Reconciliation Forms
·
A Checklist for discharge patient Education
·
A Checklist for post discharge continuity
checks.
In addition to the process
of follow up there have been provisions made by the ACA where facilities were
charged a hospital for excess Medicare readmissions. Interestingly, hospitals,
serving a large number of low-income patients were about twice as likely to
receive penalties (77 percent) as hospitals with fewest poor patients (36
percent) (James 2013)
According to the Robert J
Woods foundation:
One patient, Eric, said he left the
hospital dog tired with a diagnosis of chronic obstructive pulmonary disease
but no understanding of when to use his inhaler. He also continued to smoke. To
no one’s surprise, he was back in the hospital. Thankfully, the second time
around, he was flagged by his health plan and received better follow-up care.
He now answers five questions daily so his care team can monitor his breathing,
and he takes smoking cessation classes.
(Goodman
2013)
Another issue to why
patients are readmitted to hospital is when a patient leaves the hospital with
a treatment plan for one illness when other problems of equal importance are
ignored. Many patients are discharged without understanding their illnesses or treatment
plans, or inadvertently discontinue important medicines needed to stay well.
Operational Waste
What is operational Waste?
According to PriceWaterhouseCoopers Operational waste is, ”where administrative
or other business processes appear to add costs without creating value.” (PwC
2008)
Inefficient payment for
services is an idea that money can be saved based upon how the transaction
occurs. Instead of sending healthcare information via mail or other land based
carrier significant money can be saved. According to PNC Bank on Average
hospitals send information four times before it is paid in full. Health plans
said they have to go back to providers on average six times to get additional
pay a claim. In 2006 9 in 10 executives still use regular mail and receive
paper claims. In 2010 United Health estimated paying for over 145 million
claims at $.21 per claim. Electronic claims are estimated to have brought down
the transaction cost to $.018 per transaction or a total of $2.7 million.
(Mitchell 2011) According to the American Health Information Management
Association the process goes like this, when a patient makes an appointment the
process begins there must be a collection of the patient’s information to
include name, address, insurance or payer, and medical history. Once the
patient sees the physician the physician must document the procedures sometimes
through dictation, annotation, or through the electronic medical records
system. The information may then go to
through a process to record the information in the patient’s medical records.
Then the coders need to make sure that the coding is correct or add coding for
the services performed. Next there must
be a charge entry to the record and the information must then be transmitted to
the insurance payer for further review to make sure evidence of care. Once the
insurance firm has the correct information and evidence of care then the
payment posting is made to the healthcare facility. As accounts receivable
receives payment the bill is finally closed out. (Crocker 2006)
According to articles here
are 3 benefits for using an integrated EMR
·
Records management one of the advantages is
that multiple users can access the records with an ability to monitor usage and
effective security controls.
·
Chart analyses and completion with the EHR if
there are missing signatures then a flag can be raised on the system versus
waiting for the medical record to be audited and pass through a series of steps
to complete the information the amount of time saved from this is significant.
Chart analysis can be done for rural areas to optimize workforce strategies.
·
Coding and reimbursement is another area
where EHRs can effectively enhance operations. Due to data being available real
time the coding process can be done in prior to discharge. Also coding can be
done outside of the local labor market. (Deschenes 2012)
Behavioral Waste
What is Behavioral Waste? Behavioral
Waste PriceWaterhouseCoopers defines behavioral waste as, “where individual
behaviors are shown to lead to health problems, and have potential
opportunities for earlier, non-medical interventions. (PwC 2008)
Preventable conditions in
healthcare are unhealthy behaviors such as smoking, poor eating habits, and
lack of exercise. According to A Partnership for Prevention paper titled The
Economic Argument for disease Prevention: Distinguishing between Value and Savings
“unhealthy behaviors account for 38% of all deaths in the United States.” There
are three kinds of prevention Primary prevention, Secondary prevention and
Tertiary prevention. Primary prevention
is enhancing the lifestyle. Secondary prevention is screening for the diseases
caused by lifestyle. Finally, Tertiary prevention is treating the disease. It
is important to distinguish between healthcare and medical care. Preventative
medicine can be categorized as healthcare. Secondary care can be categorized as
medical care. (Woolf 2009) This distinction is noted because a person can
receive medical care but it the unhealthy habits persist; all the money spent
will only treat the problem versus eliminating the problem. In order to get the
biggest value out of this category prevention is the biggest value.
Possible
Solutions
Clinical
waste
In
the category of clinical waste one of the main areas is defensive medicine or
the idea that medical professionals are running extra tests in order to prevent
lawsuits. Studies have shown how the
amount paid for malpractice lawsuits has been on the decline. (Lincoln 2013)
The article goes on to conclude that there is no evidence that the decline in
medical malpractice payments is due to safer medical care. If medical malpractice
litigation were truly the, “the biggest cost driver” in medicine, then
declining payments should have pulled overall health costs down. The article goes on to conclude that instead
of focusing on malpractice claims and lawsuits facilities should focus on
avoidable medical errors. This overlaps
with the hospital readmission rates. Just by virtue of hospital readmission
being a component of quality of care. (Lincoln 2013)
Operational
Waste
Under
operational waste is the component of inefficient payment of services. To
remedy inefficient payment there is information technology. Under this category
PricewaterhouseCoopers also listed inefficient use of technology as an area of
waste.
Behavioral
Waste
Under
the category of behavioral waste are the preventable portions where education
and lifestyle changes can work as a primary solution to problem. According to
Harvard School of Public Health lists 6 key behaviors:
·
Choosing
healthier foods (whole grains, fruits and vegetables, healthy fats and protein
sources) and beverages
·
Limiting
unhealthy foods (refined grains and sweets, potatoes, red meat, processed meat)
and beverages (sugary drinks)
·
Increasing
physical activity
·
Limiting
television time, screen time, and other “sit time”
·
Improving
sleep
·
Reducing
stress (Harvard 2014)
Conclusion
The
underlying things that could help on the clinical and operational side are the
ability to coordinate and to be able to decide. To be able to enhance
coordination and decision
there
are information technology systems that can streamline the way the business is
done.
For
example in the clinical waste basket there are issues with defensive medicine
or medical errors as well as hospital readmissions which can also be described
as a medical error. If we examine what
happens from the time a person enters a healthcare facility to the time they go
home we can note that all of the detailed patient information and services has
to go into the medical record as well as the billing record.
Technology
is now to the point where the patient can be managed real time by multiple
people versus in the old way information was recorded by one singular person at
a time. Sometimes there are errors in
patient data as in the example of the patient that comes in with the worried
look and indigestion the physician can look at the patient medical record to
see which tests have been run already and not duplicate services. The patient
can then receive their prescription a cross reference against what the patient
is taking so that the physician and pharmacist can cross reference against
allergies or check for interactions. All of this can happen while
simultaneously coding the information for billing purposes and as soon as the
patient is leaving the facility the billing and paying entity can receive their
information. The patient can receive the information of services as well as any
instructions for follow on care. All of this can happen from the ability to
effectively utilize the electronic medical record as well as networking
capabilities.
When
it comes to behavioral waste this component can be moderately helped through
education and information. After the patient receives their services through
the electronic medical record the patient can receive educational materials. In
the future the hospitals or healthcare provider can track whether or not the
patient is following the instructions that have been sent to the patient to be
able to continue their care.
The
applications of information technology and sharing can have huge impacts on the
way current processes are done. I think that a large amount of processes can be
managed through information technology beginning with the electronic health
record and integrating of information sharing between care facilities as well
as payers. Even if there are more reporting requirements are needed with IT
systems it would be a matter of deciding which information is tracked and which
information needs to be communicated to whom.
According
to the Pathways to “Evidnce-Informed” Policy and Practices a frame work for
action “The framework encourages research and planning in the area of how to
“adopt, adapt, and act” on the evidence and in capacity for implementation as
part of the evidence-informed policy development process.” (Zwi 2005) This
review of what the issues in healthcare waste are will help get a basic
understanding of what ideas to adopt; and how to put actions into place to
solve some of the issues with cost.
References
Cerrato, Paul Defensive
medicine:A solvable problem Healthcare Finance News Retrieved from:
Crocker, Janice 2006 How to
Improve Your Revenue Cycle Processes in a Clinic or Physician
Practice,
AHIMA 78th National Convention and Exhibit Proceedings Retrieved
from: http://library.ahima.org/xpedio/groups/public/documents/ahima/bok1_035391.hcsp?dDocName=bok1_035391
Deschenes, Steff (2012) 3
Operational benefits of EHR adoption, Healthcare Finance News Retrieved
from:
http://www.healthcarefinancenews.com/news/3-operational-benefits-ehr-adoption?single-page=true
Harvard (2014) Obesity
Prevention Strategies, Harvard School of Public Health Website hsph.harvard.edu
last accessed on
4/16/2014
Retrieved from: http://www.hsph.harvard.edu/obesity-prevention-source/obesity-prevention/
Hermer, Laura; Brody, Howard
2010, Defensive Medicine, Cost Containment, and Reform Journal of
Internal
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Identifying
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from https://www.cms.gov/Research-Statistics-Data-and-Systems/Research/HealthCareFinancingReview/downloads/08Fallpg75.pdf
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healthcare cost, Healthcare Finance
News Retrieved from:
http://www.healthcarefinancenews.com/news/malpractice-not-cause-healthcare-cost
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http://healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_102.pdf
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Hospital Readmissions,
Robert
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Lincold, Taylor (2013) No
Correlation Continued Decrease in Medical Malpractice Payments Debunks
Theory
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