Newsletter: The Most Expensive Device in Health Care

When we talk about expensive devices in health care, the conversation often revolves around things like proton beam therapy (>$100M per installation), transcatheter aortic valve replacement ($30,000 per device) or the latest MR machine ($5M for a combined PET/MR). Non-devices also make the list. For example, high-cost drugs may creep into the conversation, such as the Hepatitis C cure Harvoni ($94,500 for a 12-week course) or some of the latest cancer therapies (over $100,000 per year). One could even go so far as to say that the multi-million dollar EHR installs are the most expensive devices out there.

When it comes to total dollars spent, however, the most expensive device is actually a much smaller and more ubiquitous one: the physician’s pen.

This quip has been making the rounds health care policies circles for a about a decade, although the 21st century version is probably closer to a physician’s mouse-click rather than an actual pen. But a basic truth is at the core: physicians influence a truly enormous portion of every dollar spent on health care. Estimates place about 80% of health care spending under the control of physicians, accounting for $2.6 trillion dollars per year (1).

While there are certainly other drivers of cost (including high unit costs, patient lifestyle choices and administrative overhead), physicians ultimately wield huge influence over where and when health care dollars are spent. Physicians make hundreds of common, important decisions every day, such as whether to admit a pneumonia patient to the floor or the ICU, which chemotherapy combination to prescribe to a lung cancer patient, or whether to order an MRI for a back-pain patient. These have huge cost implications for payers and employers and increasingly for all of our patients.

There’s a mountain of evidence that physicians spend wildly different amounts when they take care of the same patients.  To underscore the randomness, those $2.6 trillion physician-controlled dollars are not tied to better patient outcomes. For example, a recent Health Affairs article from researchers at the University of Michigan found that some hospitals were 6.5 times more likely to admit a non-specific chest pain patient than others, with no impact on mortality up to two years later (2). Variation also exists between providers at the same organization. A JAMA article last month found that higher spending by hospitalists at the same organization did not result in lower 30-day readmissions or mortality rates for their patients. Interestingly, they also found that variation in case-mix adjusted spending was actually more significant between physicians within the same hospital than between the average difference between hospitals (3).

Obviously, the opportunity to change physician decisions and lower costs, could be low hanging fruit compared to other cost reductions, elimination of expensive devices or even reducing access. Influencing and changing physician behavior to reduce spending variation can be very difficult. Notwithstanding, it lies at the core of everything health care leaders are asked to do in today’s cost-reduction-quality-improvement-enhanced-access world.

We all believe that physicians want to do the right thing for patients, but ingrained practice patterns, evolving guidelines, lack of visibility into total cost of care and absence of real-time feedback with useful information leads to inefficient, costly and potentially dangerous variation.

At QURE, using our unique Clinical Performance and Value (CPV) case simulations, we have been able to both measure that variation and change it through targeted feedback and facilitated group discussions. The CPVs give us the chance to have all providers care for the exact same patient and collaboratively discuss how to reduce that variation as a group. Here are a few examples of the impact this approach can have:

  • Primary care: In a large ACO, we found that 70% of heart failure patients with symptoms that should be easily managed primary care setting were being referred on to cardiologist. Over multiple rounds of engagement, that was reduced to 9%, saving an estimated $6.2 million dollars in unneeded specialist care and work-up.
  • Oncology: With a large group of medical oncologists, we found that only 27% were including palliative/supportive care measures in their initial treatments for late-stage lung cancer patients. Working together with the group, that number rose to 61%, saving an estimated $2.7 million dollars.
  • Hospitalists: Recognizing sepsis early, and administering guideline-line based therapy is the most effective way to save both lives and money with this common and costly condition. In our work with hospitalists, we have seen a 15% improvement in primary diagnosis rates for sepsis patients, saving an estimated $1.3M for every 1,000 sepsis patients seen.

The physician keyboard/mouse is a powerful device that saves countless lives every day. When used judiciously and purposefully, it can be equally effective at saving money and lowering costs. We would look forward to talking with you about how QURE can help you maximize the important power your physicians wield. Contact us at QUREsupport@qurehealthcare.com or call us at 415-321-3388.

 

(1) http://www.commonwealthfund.org/publications/commentaries/2009/apr/change-the-microenvironment

(2) http://content.healthaffairs.org/content/33/9/1655.abstract

(3) http://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2608538