5 Strategies to Control Cost, Quality and Access to Healthcare

Waste and fraud are just two factors contributing to rising healthcare costs in the US.

Posted by Joe Gerard in Healthcare Fraud, SIU & OIG on November 22nd, 2010

One of the key lessons I learned last week was that not every dollar invested in healthcare goes toward making someone better. Waste and fraud are just two factors contributing to rising healthcare costs in the US. At the 2010 NHCAA Anti-Fraud Training conference last week in Las Vegas, a team from Thomson Reuters presented on the topic of “Detecting, Eliminating Waste and Fraud in Government Programs”. The group outlined and discussed 5 strategies to control cost, improve quality and increase access to healthcare. Thomson Reuters has extensive experience working with all stakeholders in healthcare, so it was great to hear firsthand what some of their solutions and strategies were. Here are my notes from the session and the 5 strategies suggested by Thomson Reuters:

5 Strategies for Reducing Wasteful Healthcare Spending:

  • Without efforts to control healthcare expenditures, US system waste could reach $1.6 trillion by 2020- doubling in just 10 years.
  • Reasons for implementing a culture of health- healthcare costs are rising- 16% of GDP and rising.
  • Employee insurance costs rose 7.3% in 2009.
  • Substantial monetary and productivity losses due to health issues.
  • NEHI defines waste as “Healthcare spending that can be eliminated without reducing the quality of care.”
  • 1/3 healthcare dollars spent doesn’t go to making someone better.

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Should these be considered waste?

  • Increased disease due to modifiable behaviors- many conditions can be avoided by adopting healthier lifestyles.
    • Is the system responsible for reducing these excess costs.
  • High price of medical services- US charges higher prices than other countries for services such as specialist procedures, hospital stays and prescription drugs.

Reasonable Goal:

  • New England Journal of Medicine
  • If a phased reduction of waste- starting at 5% per year and increasing by 5% over the next 10 years, $3.6 trillion would be saved.

Targets for Reducing Waste:

Fraud and Abuse

  • Suggested target reduction- 15% in 5 years, 60% in 10 years.
  • Challenges: They payer and receiver of the services are separate.
  • Fraudsters are very skilled at manipulating the system.
  • Healthcare professionals minimize the extent of fraud, claiming it’s only among non-professionals.
  • Payers don’t want to jeopardize their relationships with clients.

5 Strategies for Reducing Wasteful Healthcare Spending:

1. Consumer Activism and Transparency

  • Encourage patients and consumer to become actively involved in their own care. Educate and engage them on the value and risks of specific treatment options.
  • Eliminate disincentives for more conservative treatment options.

2. Systems Improvements and Care Coordination

  • Better link providers in actual or virtual teams. Make all relevant information available at point of care.
  • Reduce fragmentation in the delivery of care.
  • Improve care coordination and eliminate redundancy- send information back to primary providers, if available, to make their records complete.

3.  Patient Safety and Quality Improvement

  • Set industry goals- Learn from mistakes, Six Sigma.
  • Encourage and support quality improvement initiatives to reduce healthcare treatment errors.

4. The Medical Home and Culture of Health

  • Ensure that patients are actively engaged, along with their clinicians, in managing their own health.
  • Promote healthy workplaces and environments that make wellness a priority.

5. Payment Integrity/Fraud and Abuse

  • Engage the community in programs that simplify the billing process while eliminating opportunities for fraud and abuse.
  • Educate public and provider community impact of fraud on available resources.
  • Recognize providers for high levels of payment integrity- reward for best practices.

Key Algorithms for 2011

  • A list of ways to identify fraud, such as distance between beneficiary address and provider location, submissions including a large number of high-intensity codes, services after the death of a patient and overuse of specific combinations of medical codes.
  • Algorithm identified $60 million in ambulance trips to nowhere- one state alone in the US.
  • Put drug seekers and “doctor shoppers” into lock in programs.
  • Geographic distance- obviously patients are likely to travel for major procedures (Mayo Clinic, Pediatric Oncology, etc.) but they shouldn’t need to travel those distances for basic checkups and such.

Joe Gerard
Joe Gerard

CEO, i-Sight

Spend my days showing off the i-Sight investigative case management software and finding ways to help clients improve their investigations. Usually working with corporate security, HR & employee relations, compliance and legal teams.

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