JAMA, ARM, evidence, and policy come together

Today, in a special JAMA Online First, released to coincide with the AcademyHealth Annual Research Meeting, a piece by Karen Joynt, Atul Gawande, John Orav, and Ashish Jha addressed Medicare spending and containment in a manuscript entitled, “Contribution of Preventable Acute Care Spending to Total Spending for High-Cost Medicare Patients”:

Importance:  A small proportion of patients account for the majority of US health care spending, and understanding patterns of spending among this cohort is critical to reducing health care costs. The degree to which preventable acute care services account for spending among these patients is largely unknown. Objective:  To quantify preventable acute care services among high-cost Medicare patients. Design, Setting, and Participants:  We summed standardized costs for each inpatient and outpatient service contained in standard 5% Medicare files from 2009 and 2010 across the year for each patient in our sample, and defined those in the top decile of spending in 2010 as high-cost patients and those in the top decile in both 2009 and 2010 as persistently high-cost patients. We used standard algorithms to identify potentially preventable emergency department (ED) visits and acute care inpatient hospitalizations. A total of 1 114 469 Medicare fee-for-service beneficiaries aged 65 years or older were included. Main Outcomes and Measures:  Proportion of acute care hospital and ED costs deemed preventable among high-cost patients.

Joynt and colleagues provide some sobering results that have implications for control of health care spending. Based on an analysis of cost data for inpatient and outpatient services from 2009 and 2010 for more than 1 million Medicare beneficiaries older than 65 years, the authors confirmed what many know to be true—that 10% of the Medicare population accounts for about 70% of the program's spending. However, the surprising result was that a small amount (10%) of spending for this high-cost group is attributable to hospital admissions or emergency department visits that are preventable. This potentially preventable spending on emergency department use and hospitalization is certainly nothing to ignore, yet even saving the entire amount (which is unlikely) is not the panacea some might have hoped. Moreover, the authors found that hospital referral regions with more primary care and specialist physicians had more preventable spending, suggesting the possibility that increasing outpatient services may not be a mechanism for reducing spending. These findings certainly do not suggest abandoning efforts to reduce preventable emergency department use and hospitalizations. Joynt et al do not consider the social cost of this utilization. Even though avoiding some emergency department use and hospital admissions might not save much money—and certainly not enough to declare victory in controlling health spending—preventing such use when possible would be of substantial benefit to patients, both those who would otherwise use these services and those who have their care delayed because of overburdened emergency department and hospital resources. Even with no cost savings, reducing preventable use of high-intensity and capacity-constrained care would enhance efficiency. Improvements to quality are not always substantial cost savers but still may be worthwhile.