Healthcare Waste: A Conversation with Dr. Mark Fendrick
Practical Analytic Approaches to Healthcare Challenges
Dr. Mark Fendrick conceptualized and coined the term Value-Based Insurance Design and is the director of the Value-Based Insurance Design Center (VBID) at the University of Michigan. His research focuses on how clinical payment and consumer engagement initiatives impact access to care, quality of care, and healthcare costs. He has authored over 250 articles and book chapters and has received numerous awards for the creation and implementation of value-based insurance design. He spoke with Milliman MedInsight about healthcare waste and his work with the MedInsight Health Waste Calculator.
Question: You spent your career trying to improve access to high-value care. Why have you gotten into the low-value care arena?
Well, it turns out that most of the services that people consider high value - I like to say the things I beg my patients to do - while they improve individual and population health, they tend to add to overall healthcare costs. Often in modest ways, sometimes in high ways.
So given that most public and private payers are very concerned about the rate of healthcare cost growth, it has been incumbent upon us who have been pushing payers to use more of high-value care to identify potential opportunities to reduce spending on those services that don’t make Americans any healthier to allow us some head room to buy more of those high-value services that are currently underutilized. Early Value-Based Insurance Design, or VBID, just included reductions in consumer out of pocket costs for high-value services. As people used them more often costs went up.
Now we’re trying to identify those low-value services, make them more difficult for people to access, take advantage of those immediate and substantial savings, and hopefully have much of those savings be put back into services that improve Americans’ health.
Question: Where do you think a payer should start when thinking about low-value care?
Low-value care is a little bit tricky in the fact that when you start removing certain services or making it more difficult to access certain services there is going to be special interest and concern, whether it be on the provider side or on the patient side. So we decided to get a number of stakeholders from across the country together and identify services that were easy to find in claims that were almost always low-value when they were used, and that if we got rid of them no one would really mind.
We wanted these to be below the radar, or as I like to say fruit below the ground. This national multi-stakeholder Task Force on Low-Value Care selected five commonly overused services ready for action for purchasers to identify and eliminate. They include: diagnostic testing and imaging prior to low-risk surgery, population based vitamin D screening, prostate specific antigen testing for men over the age of 65, imaging in the first six weeks after muscular-skeleto back pain injury, and the use of branded drugs when a chemically identical generic was available.
It’s our hope that tools like the Health Waste Calculator can help payers identify these and many other services. Services that if they were successfully removed would pretty much not be noticed and would allow payers millions, if not billions, of dollars to spend on those high-value services that are currently out of reach for many people in America.
To read more about our conversation with Dr. Fendrick click here.