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Reducing Wasteful Healthcare Spending to Control Cost and Access

Reducing wasteful healthcare spending can help rising healthcare costs in the US.

Posted by Joe Gerard on November 22nd, 2010

Not every dollar invested in healthcare goes toward making someone better. Waste and fraud are just two factors contributing to rising healthcare costs in the US.

A team from Thomson Reuters presented on the topic of “Detecting, Eliminating Waste and Fraud in Government Programs.” The group outlined and discussed 5 strategies to control cost, improve quality and increase access to healthcare. Here are the five strategies suggested by Thomson Reuters.

 

The first step to reducing wasteful healthcare spending is to know the common schemes.

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Reducing Wasteful Healthcare Spending: A How-To Guide

  • Without efforts to control healthcare expenditures, US system waste could reach $1.6 trillion by 2020- doubling in just 10 years.
  • Reasons for implementing a culture of health- healthcare costs are rising- 16% of GDP and rising.
  • Employee insurance costs rose 7.3% in 2009.
  • Substantial monetary and productivity losses due to health issues.
  • NEHI defines waste as “Healthcare spending that can be eliminated without reducing the quality of care.”
  • 1/3 healthcare dollars spent doesn’t go to making someone better.

 

Should these be considered waste?

  • Increased disease due to modifiable behaviors- many conditions can be avoided by adopting healthier lifestyles.
    • Is the system responsible for reducing these excess costs.
  • High price of medical services- US charges higher prices than other countries for services such as specialist procedures, hospital stays and prescription drugs.

 

Reasonable Goal

  • New England Journal of Medicine
  • If reducing wasteful healthcare spending was phased- starting at 5% per year and increasing by 5% over the next 10 years, $3.6 trillion would be saved.

 

RELATED: What is Medicare Part D Fraud?

 

Targets for Reducing Waste

Fraud and Abuse

  • Suggested target reduction- 15% in 5 years, 60% in 10 years.
  • Challenges: They payer and receiver of the services are separate.
  • Fraudsters are very skilled at manipulating the system.
  • Healthcare professionals minimize the extent of fraud, claiming it’s only among non-professionals.
  • Payers don’t want to jeopardize their relationships with clients.

 

5 Strategies for Reducing Wasteful Healthcare Spending

1. Consumer Activism and Transparency

  • Encourage patients and consumer to become actively involved in their own care. Educate and engage them on the value and risks of specific treatment options.
  • Eliminate disincentives for more conservative treatment options.

2. Systems Improvements and Care Coordination

  • Better link providers in actual or virtual teams. Make all relevant information available at point of care.
  • Reduce fragmentation in the delivery of care.
  • Improve care coordination and eliminate redundancy- send information back to primary providers, if available, to make their records complete.

3.  Patient Safety and Quality Improvement

  • Set industry goals- Learn from mistakes, Six Sigma.
  • Encourage and support quality improvement initiatives to reduce healthcare treatment errors.

4. The Medical Home and Culture of Health

  • Ensure that patients are actively engaged, along with their clinicians, in managing their own health.
  • Promote healthy workplaces and environments that make wellness a priority.

5. Payment Integrity/Fraud and Abuse

  • Engage the community in programs that simplify the billing process while eliminating opportunities for fraud and abuse.
  • Educate public and provider community impact of fraud on available resources.
  • Recognize providers for high levels of payment integrity- reward for best practices.

 

RELATED: The Ultimate Guide to US Healthcare Fraud Schemes

 

Key Algorithms

  • A list of ways to identify fraud, such as distance between beneficiary address and provider location, submissions including a large number of high-intensity codes, services after the death of a patient and overuse of specific combinations of medical codes.
  • Algorithm identified $60 million in ambulance trips to nowhere- one state alone in the US.
  • Put drug seekers and “doctor shoppers” into lock in programs.
  • Geographic distance- obviously patients are likely to travel for major procedures (Mayo Clinic, Pediatric Oncology, etc.) but they shouldn’t need to travel those distances for basic checkups and such.
Joe Gerard
Joe Gerard

CEO, i-Sight

Spend my days showing off the i-Sight investigative case management software and finding ways to help clients improve their investigations. Usually working with corporate security, HR & employee relations, compliance and legal teams.

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