Our recent research study, conducted with Employee Benefit News/Arizent, revealed an interesting trend among employee benefit leaders. When asked, “Does your organization focus more on the quality of employee healthcare or more on managing the costs of employee healthcare?”, respondents told us this.
This came as a surprise to me, as I’m sure it will to many others who have worked in the employee benefits industry. For years, we’ve attended conferences, listened to webinars, and participated in panicked conversations about the astronomical price of providing healthcare to employees. We know that benefits leaders across all industries want to improve employee health and well-being, and it seems their strategy for doing so is to address quality.
A recent article from the New England Journal of Medicine looked at numerous studies conducted over the last decade to conclude that anywhere from 17% to 53% of U.S. healthcare spending is wasted, amounting to a range of $600 billion to $2 trillion in costs. Many experts cite healthcare waste at around 30%, and it can include everything from inappropriate care, clinical inefficiencies, overuse, missed prevention opportunities, and fraud/abuse. Overtreatment, overmedication, and overtesting is a big piece of the puzzle.
I’d like to dive into what “healthcare quality” really means, how it’s measured and defined in employee benefits, and what role benefits data can play in combating waste and improving the quality of care for patients.
There are lots of ways to determine healthcare quality, but the Institute of Medicine’s six domains are a widely respected and utilized framework. The six domains are:
These characteristics of care all contribute to the quality delivered at a system-wide level. In order for a hospital, clinic, or care network to meet quality standards, they must ensure the services they offer to patients can be defined as safe, effective, patient-centered, timely, efficient, and equitable. But what does quality mean for an individual physician? What must they do to deliver quality care to their patients?
I would argue that the number one mark of a quality doctor is how well they discern the appropriateness of care. The domains of “effectiveness” and “efficiency” are a big part of this. Doctors must be able to determine when medical care is appropriate and when it is not. They must look more widely at the overwhelming waste in the system and apply the lessons to individual patients who may be seeking care that isn’t necessary.
A recent JAMA study, highlighted in Fierce Healthcare, describes the problem:
“Overuse of health care, or the provision of low-value or no-value care, is consistently identified as contributing to high costs in the US health care system,” the researchers wrote in JAMA Health Forum. “This wasteful care is physically, psychologically and financially harmful to patients.”
Unnecessary, wasteful care is actually harmful to patients. Not only can it prolong suffering and delay appropriate treatment, but it can actually financially harm patients if they pay for services that don’t help them. For example, if a patient undergoes a knee replacement surgery when a physical therapy program could have achieved the same outcomes, they would not only go through additional pain and recovery time, but would also be looking at hitting their out-of-pocket max for the year instead of much lower copays for physical therapy sessions.
As we know from our research study, employers place a lot of emphasis on healthcare quality. They want to help their employees get exceptional, appropriate care and reduce the waste in the system. While they can directly partner with the right hospital systems or Centers of Excellence to ensure the IOM’s domains of care are available to their members, they can also put into place plan designs that ensure each patient is experiencing quality care.
Walmart is a prime example of the Centers of Excellence approach. While they employ people all over the country, they have chosen elite health systems for certain procedures. As Becker Hospital Review covered in a recent article, employees or dependents seeking care for cancers, cardiac conditions, joint replacement, bariatric surgery, or spine conditions have a choice of 17 top hospitals with locations in every corner of the U.S. to seek treatment.
Walmart offers 100% coverage for all these episodes of care (except weight loss surgery) and even pays for travel and lodging costs for employees and their families. By sending these patients to facilities where Walmart is confident of the quality of care, they potentially reduce costs, improve outcomes, and reduce the chances of readmission or complications.
Another great example of this is an Expert Medical Opinion (EMO) or second opinion service for employees to utilize for certain conditions. These programs require patients to seek a second opinion to ensure that surgeries are necessary, appropriate, and in the best interest of the patient. In particular, spinal surgeries and total knee replacements are surgeries where an employer’s plan might require pre-authorization to consult with an expert medical physician or surgeon in order to move forward. This way, the patient and the payer are both confident that there aren’t non-invasive options that would better serve the patient and reduce wasted care.
2nd.MD and Grand Rounds are both popular EMO/second opinion vendors that employers utilize to ensure healthcare quality. Employers are driven by data around condition trends, healthcare utilization, and costs to justify programs like these and target the right members at the right time. They’ll review typical high cost conditions, set goals around cost reduction and member engagement, prepare communications strategies, and measure the results of these efforts.
We utilize a data-driven approach at Artemis in our Actionable Overspending App. It calculates the potentially wasteful spending in five areas: avoidable ER, inefficient Rx, in-network variance, inappropriate Rx quantity, and out-of-network spending. By looking at this “low-hanging fruit,” employers can tackle waste without negatively impacting the quality of patient care.
With so many employers focused on the quality of healthcare, there will be many different approaches to defining it. I’m confident that by addressing the appropriateness of care, employers can not only make strides to reduce costs, but also improve the experiences and outcomes of employees and their families.