Value-Based Tools

Heaps of Health Care Waste. In Washington State, They Are Sifting Through It

A Washington Health Alliance report quantifies how pervasive low-value care is. ‘Drop the pre-op’ is the group’s first step toward eliminating it.

Michael D. Dalzell
Senior Contributing Editor

Waste in health care is not new, but attention to it is rapidly gaining momentum. The Institute of Medicine provided the wake-up call in its 2012 report, estimating that about 30% of health care expenditures are unnecessary. Since then, a spate of research has backed up the IOM’s calculations.

Waste has many causes—administrative bloat, poor care coordination, unwarranted care variation—but attacking these becomes more practical when we know how they play out. Now, a report from the Washington Health Alliance gives us a fresh, service-level view of where some of those wasted dollars are going.

The alliance’s December 2018 “First, Do No Harm” report looked at 48 treatments, tests, and procedures identified by the Choosing Wisely campaign as having little clinical benefit in certain circumstances and, in many cases, the potential to cause harm. Between July 2016 and June 2017, half of those services delivered to commercially insured and Medicaid patients weren’t necessary—ringing up an estimated $341 million in waste.

Many of the findings were foreshadowed in the alliance’s first report on low-value care a year ago. This version cast a wider net and included a patient population (4.4 million) double the size of that covered by the first report. “I think it suggests that practice patterns around these areas of care are pretty ingrained,” says Susanne Dade, deputy director of the alliance, a not-for-profit group that operates a statewide, all-payer claims database and whose board includes four insurers, four clinics, more than a dozen purchasers, and consumer representatives.

#1: Opioids for low-back pain

Ten of the 48 overused services in the alliance’s report (see “The Main Culprits,” below) accounted for 88% of unnecessary utilization. Few are surprises. A closer look, however, reveals a web of issues that help to explain why medical services are overused and how overuse spreads.

The main culprits

Ten of the 48 measures in “First, Do No Harm” accounted for 88% of unnecessary utilization. Data cover commercial and Medicaid claims for 4.4 million patients between July 2016 and June 2017.

Rank Service No. of “likely wasteful” and “wasteful” services No. of patients affected by waste Estimated cost of wasteful services (millions)
1 Opioids for low-back pain 232,824 105,906 $13.1
2 Antibiotics for upper respiratory and ear infections 197,758 173,718 $2.8
3 Annual EKGs or cardiac screening for low-risk individuals 196,123 179,623 $62.2
4 Imaging tests for eye disease 137,070 95,305 $40.0
5 Preoperative baseline lab studies before low-risk procedures 129,360 109,913 $74.3
6 ≥2 concurrent antipsychotic medications 118,015 16,263 $27.3
7 Routine PSA screening for prostate cancer 79,347 74,391 $8.2
8 Cervical cancer screening 52,594 51,979 $5.3
9 Population-based screening for vitamin D deficiency 40,049 38,998 $7.7
10 NSAIDs for hypertension, CHF, or CKD 39,027 31,610 $0.5
CHF=congestive heart failure, CKD=chronic kidney disease, EKG=electrocardiogram, NSAID=nonsteroidal anti-inflammatory drugs, PSA=prostate-specific antigen

Take antibiotic prescriptions for upper or viral respiratory and ear infections—an astounding 99% of which were unnecessary. We all know about the demanding parent with a screaming infant and who doesn’t believe the physician who says an antibiotic won’t help. The parent doesn’t appreciate that the antibiotic may ultimately hurt the child by creating an opportunity for antibiotic resistance.

Doctors and patients really need to have conversations about the proper use of antibiotics, says Susanne Dade of Washington Health Alliance.

Unlike many other unnecessary medical services documented in the report, this is one that Dade calls a shared responsibility between providers and patients. “That conversation between the doc and the patient really needs to happen so the patient can go away feeling cared for but not necessarily with a prescription for an antibiotic.”

Antibiotic misuse, routine EKGs, vitamin D screenings—all in the top 10—show us how waste starts. Routine PSA screenings for prostate cancer show us how it spreads. Between 85% and 90% of the screenings the alliance examined were wasteful by Choosing Wisely standards. The test itself isn’t expensive, but it can open a Pandora’s box of cost and harm to the patient.

“The test has a penchant for false positives, which lead to other interventions like biopsies, which are quite uncomfortable and expensive, and can lead to other things like removal of the prostate when it’s unnecessary,” says Dade. None of those downstream costs are captured in the report—suggesting that the volume of waste calculated in it only scratches the surface.

As for surprises, eye imaging tests, such as optical coherence tomography or photography of the fundus, for people without significant eye disease, seemed to come out of nowhere. “We work with a number of clinician leaders across the state, and this one sort of popped out as being, ‘Wow, where did that one come from?’” says Dade. The tab is substantial—137,000 wasteful services in 95,000 people, at an estimated cost of $40 million in one year.

Topping the list, in terms of number of services, was opioid prescriptions for acute low-back pain in the first four weeks after diagnosis. Fewer than 10% were considered necessary, although the overprescribing predated the recent surge in interventions to stem the opioid epidemic. “When we run this report for the time period including calendar year 2018, I would sincerely hope that the numbers will be significantly [different] based on much higher awareness and the number of initiatives that are now in place,” says Dade.

Health waste calculator

The data in the alliance’s report come from the Milliman MedInsight Health Waste Calculator, an analytical product developed in collaboration with VBID Health—the gurus of value-based insurance design led by University of Michigan professor A. Mark Fendrick, MD, and Harvard Medical School Professor Michael Chernew.

Special software can identify patterns of care that are wasteful or even harmful, says Todd Fessler of Milliman.

The group “hatched this idea of a product that could analyze claims data that, based on measures from national initiatives like Choosing Wisely, would [spot] noncompliance with these measures,” says Todd Fessler, chief marketing officer for the MedInsight product division at Milliman. The software identifies patterns of care that Fessler says are either wasteful “or, in the worst case, harmful.”

The calculator defines the degree of appropriateness of a service as “necessary,” “likely wasteful,” or “wasteful.” Those characterizations are based largely on what Choosing Wisely says, although Milliman also took into account what physician societies, the U.S. Preventive Services Task Force, and other bodies have to say about a treatment or test. With input from Fendrick and the medical community, measures are added or tweaked periodically, and the logic in the tool is refined as evidence emerges.

Few services fell into the “likely wasteful” category, although 15% of opioid prescriptions for low-back pain did. The inclusion of this category is recognition that reimbursement data aren’t perfect.

“Choosing Wisely doesn’t give you particular details about who your exclusionary cohorts might be. They just put out a statement,” says Marcos Dachary, director of MedInsight Product Management. “So, it’s up to Milliman and the VBID clinical teams to include further citations and make some clinical judgment about what populations should be excluded and how to translate the Choosing Wisely objections to claims data.”

Much of the waste identified in the report involved low-cost services: 92% of those delivered cost $538 or less. But if you think that won’t make a dent in unnecessary spending, think again. On average, the MedInsight Health Waste Calculator flags about 3% of all medical and pharmaceutical claims as wasteful. Extrapolated to projected 2019 U.S. spending on hospital and professional services and drugs, 3% equals $80 billion—or $246 for every man, woman, and child in the United States.

Drop the pre-op

Change has to start somewhere, and last year the alliance chose unnecessary preoperative testing as its target. A workgroup of clinician leaders developed a communication campaign, “Drop the Pre-op,” that urges physicians to curb the blind ordering of baseline lab studies, pre-op EKGs, chest X-rays, and pulmonary function testing in healthy people undergoing low-risk elective procedures, like cataract surgery.

The typical cardiac and lab screens for low-risk elective surgeries “are not anything [anesthesiologists] even waste their time looking at,” says Marcos Dachary of Milliman.

From Dachary’s perspective, the alliance is onto something hot. “We spoke with heads of anesthesiology,” he says, “and they didn’t even blink that the typical cardiac and lab screens for these procedures are not anything they even waste their time looking at.”

The campaign is three months young—too early to measure results—but “what I can say,” says Dade, “is there has been zero pushback from the medical community.”

The six commercial payers that work with the alliance are doing their part to foster change. Washington-based Premera Blue Cross, for instance, is examining its medical policies for alignment with the findings of the report.

Such an exercise is to payers’ advantage—and is also in line with what patients want, according to two analyses published by Health Affairs last year. In one, Daniel O’Neill and David Scheinker found that patients and private insurers tend to pick up a higher share of the cost of unnecessary or low-value outpatient services, relative to total medical expense. In the other, despite conventional wisdom that patients insist on the latest and greatest, Jeff Kulgren and colleagues at the University of Michigan found that 54% of older adults think providers order unnecessary medications, tests, or procedures.

The alliance is working to make future analyses more granular, eventually to the point of attributing data to the medical group and delivery system levels. “The provider leadership in our state is asking for that,” says Dade. “And I give them a lot of credit for that. They’re progressive enough to say ‘we have a problem, we need help identifying specific opportunities for improvement in my organization, and let’s roll up our sleeves and work.’”