Washington Health Alliance report finds downward trend in health care spending waste

In the latest edition of its First, Do No Harm series, the Washington Health Alliance details the results of an analysis on wasteful spending for the commercially-insured and Medicaid-insured populations in the state. Utilizing the Alliance’s All Payer Claims Database, the new report includes data from 2014-2017, and evaluates wasteful spending of individual medical groups.

The report used the Milliman MedInsight Health Waste Calculator to evaluate claim data for over 4 million individuals and 9.5 million services for 47 treatments, procedures, and tests that have been identified as commonly overused.

 

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Of the 9.5 million services examined, 51% were found to be “low-value” — meaning they were considered “likely wasteful” or “wasteful.” An average 846,973 individuals received at least one low-value service on each of the evaluated years, resulting in an estimated $703 million in spending on low-value care.

The report notes that despite national reports stating that about one-quarter to one-third of health care spending in the country is waste, in Washington there was a significant decrease in low-value care from 2014-2017. The report finds a 10% decrease in waste for the commercially-insured and a 24% decrease for the Medicaid-insured.

“While we don’t have a full explanation for this reduction in low-value care from 2014 through 2017, we can all agree this is an encouraging trend that we hope indicates that here in Washington, we are starting to take action to reduce waste,” said Washington Health Alliance Executive Director Nancy Giunto in a press release.

The amount of low-value care for commercially-insured members was measured in 32 medical groups. For these specific medical groups, there was an 8% decline in low-value services over the 4 years studied. There was, however, significant variation among the groups, with a 2.2-fold difference between the best and worst performing groups.

PeaceHealth Medical Group had the lowest use of low-value services with 322.2 per 1,000 individuals. They were closely followed by Kaiser Permanente Washington (324.8 per 1,000) and the Vancouver Clinic (338.9 per 1,000). Ranked at the bottom of the list, with the highest use of low-value services, was Western Washington Medical Group at 703.1 per 1,000.

The top 10 areas of low-value care for the commercially insured include: annual cardiac screening for low risk individuals, opiates prescribed for acute low back pain in the first 4 weeks, antibiotics prescribed for acute URA and ear infections, and too frequent screenings for prostate and cervical cancers and Vitamin D deficiencies.

The top 10 services accounted for 94% of all low-value care at an estimated cost of $500 million.

The report also evaluated 32 medical groups for the Medicaid-insured population. For these groups, there is a 2.6-fold difference between the best and worst performing medical groups for low-value services.

Public Health-Seattle King County is the top performer at 258.1 services per 1,000. Columbia Basin Health Association sat at the bottom of the list with 659.3 low-value services per 1,000.

The top 10 areas of low-value care for Medicaid-insured were similar to those in the commercially-insured population.

“This list gives us a great place to start to reduce waste. We all need to make overuse in health care at the core of honest discussions about health care value in our state,” says Alliance Deputy Director Susie Dade. “Clinical appropriateness needs to be a criterion for high quality. Delivering tests and treatments to patients who won’t benefit from them is not good quality.”

The Alliance recommends several actions to reduce waste in Washington State:

  • making overuse part of discussions about improving health care value;
  • encouraging clinic leaders to incorporate low-value care reduction in their practices;
  • helping patients decrease the low-value care they request;
  • transitioning from paying for volume to paying for higher value care; and
  • requiring measuring wasteful care in contracts with doctors and clinics.