Improving Value in Health Care: Challenges and

Potential StrategiesArnold M EpsteinOctober 24, 2008

Congressional Health Care Reform Education Project

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The Persisting The Persisting ChallengesChallenges

Quality Cost

$0

$500

$1,000

$1,500

$2,000

$2,500

1960 1970 1980 1990 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

NHE as a Share of GDP

National Health Expenditures and National Health Expenditures and Their Share of Gross Domestic Their Share of Gross Domestic

Product, 1960-2006 Product, 1960-2006

Source: Centers for Medicare and Medicaid Services, Kaiser Family Foundation

Dollars

in

Billion

s

5.2% 9.1% 13.7% 13.6% 13.8% 15.3% 15.9% 16.0%

On Main Street On Main Street Affordability is the IssueAffordability is the Issue

• Premiums increased 8.5% annually in the last Premiums increased 8.5% annually in the last 4 years4 years

• Individual coverage costs $4,700; family Individual coverage costs $4,700; family coverage costs $12,680coverage costs $12,680

• Increasing costs show no signs of abatingIncreasing costs show no signs of abating

• Polls show that affordability is the number one Polls show that affordability is the number one health care issue for likely votershealth care issue for likely voters

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The Persisting The Persisting ChallengesChallenges

Quality Cost

““There is abundant evidence There is abundant evidence that serious and extensive quality that serious and extensive quality

problems exist throughout problems exist throughout American medicine.”American medicine.”

Institute of Medicine Institute of Medicine

Opportunities to Improve Opportunities to Improve Quality Quality

are Ubiquitousare Ubiquitous

Only 28-36% of elderly receive Only 28-36% of elderly receive pneumococcal vaccines when they pneumococcal vaccines when they should.should.

Only 41-54% of hypertensives have Only 41-54% of hypertensives have their blood pressure controlled.their blood pressure controlled.

Failure to provide proven therapies Failure to provide proven therapies for AMI results in 18,000 for AMI results in 18,000 preventable deaths annually.preventable deaths annually.

Medical Error is the 8Medical Error is the 8thth Leading Cause of DeathLeading Cause of Death

Source: To Err is Human: Building a Safer Health System, Institute of Medicine, November 1999.

44,000

43,458

42,497

16,516

Medical Errors

Motor Vehicle

Accidents

Breast Cancer

AIDS

Disparities in Care by Race, Disparities in Care by Race, Ethnicity and Social Class Ethnicity and Social Class

AboundAbound

Per Capita Medicare Per Capita Medicare Expenditures Vary Nearly Expenditures Vary Nearly

Two-fold Across StatesTwo-fold Across States

Source: Dartmouth Atlas

Per Capita Medicare Spending and Overall Quality of Care (24

Indicators)

Source: Baicker and Chandra, Health Affairs, 2004

Options to Achieve Higher Options to Achieve Higher Value-Reducing Costs and Value-Reducing Costs and

Raising QualityRaising Quality Primary PreventionPrimary Prevention Disease ManagementDisease Management Public ReportingPublic Reporting Managed CareManaged Care Payment Reform (eg P4P)Payment Reform (eg P4P) ConsumerismConsumerism Information TechnologyInformation Technology Comparative EffectivenessComparative Effectiveness

Options to Lower Cost or Options to Lower Cost or Raise QualityRaise Quality

Primary PreventionPrimary Prevention Delays illness, unlikely to save costsDelays illness, unlikely to save costs

Disease ManagementDisease Management CBO report: increased quality, no impact CBO report: increased quality, no impact

on coston cost

Public ReportingPublic Reporting Modest impact on quality, not much on Modest impact on quality, not much on

costcost

Strategies to Lower Cost Strategies to Lower Cost or Raise Qualityor Raise Quality

Managed CareManaged Care Some potential, enrollment is a concernSome potential, enrollment is a concern

Payment Reform (eg P4P, medical home)Payment Reform (eg P4P, medical home) P4P has modest impact on quality, growing P4P has modest impact on quality, growing

focus on “efficiency”; medical home broadly focus on “efficiency”; medical home broadly pilotedpiloted

ConsumerismConsumerism Some impact Some impact threats to access, and 10% of patients threats to access, and 10% of patients

account for 70% of the costsaccount for 70% of the costs

What is Health Information What is Health Information Technology?Technology?

Health IT includes a diverse set of technologies Health IT includes a diverse set of technologies for transmitting and managing health for transmitting and managing health information.information.

Electronic health records are the lynchpin of HITElectronic health records are the lynchpin of HIT Core functionsCore functions

Health information and data ( e.g. problem and med lists),Health information and data ( e.g. problem and med lists), Results management (lab and imaging results)Results management (lab and imaging results) Order entry and supportOrder entry and support Decision supportDecision support

Other FunctionsOther Functions Patient support, reporting and population management, Patient support, reporting and population management,

electronic communicationelectronic communication

The Promise of HITThe Promise of HIT Chadhry et al reviewed 257 studies (2006)Chadhry et al reviewed 257 studies (2006)

Multi- function EHRs increased adherence to Multi- function EHRs increased adherence to guidelines, reduce medication errors, and guidelines, reduce medication errors, and decreased use of caredecreased use of care

Key studies were from 4 institutions that Key studies were from 4 institutions that pioneered IT and developed their own EHRspioneered IT and developed their own EHRs

Data on cost of care were limitedData on cost of care were limited

RAND corporation estimated that a 90% RAND corporation estimated that a 90% rate of adoption of EHRs in hospitals and rate of adoption of EHRs in hospitals and physician offices would save net $531B physician offices would save net $531B over 15 yearsover 15 years

The Challenges to HIT The Challenges to HIT

Source: DeRoches et al N Engl J Med , 2008

What is Comparative What is Comparative Effectiveness?Effectiveness?

Comparative effectiveness analysis evaluates Comparative effectiveness analysis evaluates the clinical effectiveness of drugs, surgical the clinical effectiveness of drugs, surgical procedures, devices, and dxic tests versus procedures, devices, and dxic tests versus the alternatives.the alternatives.

Comparative Effectiveness will address Comparative Effectiveness will address shortfalls in the current system shortfalls in the current system Comparisons among competing alternativesComparisons among competing alternatives Evaluation of long term efficacy and adverse Evaluation of long term efficacy and adverse

effectseffects Review of diagnostic and surgical procedures,Review of diagnostic and surgical procedures,

The Promise of Comparative The Promise of Comparative EffectivenessEffectiveness

Comparative effectiveness information has Comparative effectiveness information has the potential to rationalize our use of the potential to rationalize our use of services and promote care of higher value services and promote care of higher value and qualityand quality

MedPAC has proposed that Congress create MedPAC has proposed that Congress create a comparative-effectiveness entitya comparative-effectiveness entity Independent with public and private fundingIndependent with public and private funding Examine comparative-effectiveness over timeExamine comparative-effectiveness over time Disseminate information to its constituentsDisseminate information to its constituents No role in recommending coverageNo role in recommending coverage

The Challenges to The Challenges to Comparative Comparative EffectivenessEffectiveness

Prodigious undertakingProdigious undertaking Many unanswered questions:- design of the Many unanswered questions:- design of the

board, placement, level of funding, primary board, placement, level of funding, primary versus secondary data collectionversus secondary data collection

Will costs be considered, and if so what levels Will costs be considered, and if so what levels of cost effectiveness will be unacceptable of cost effectiveness will be unacceptable

How will judgments be translated into How will judgments be translated into clinical policy and utilization review? Will clinical policy and utilization review? Will CMS change current policy to cover any CMS change current policy to cover any “reasonable and necessary” treatment“reasonable and necessary” treatment