COST CONSCIOUS CARE

Why?

HOW MUCH HEALTHCARE WASTE IS THERE?

Health Care Waste

• 2010: $2.6 Trillion in Healthcare Costs in US– 30% ($765 Billion) = Waste

• $395 Billion = Physician Controlled Waste– $210 billion = Unnecessary services– $130 billion = Inefficient care delivery– $55 billion = Missed prevention

opportunity

Institute of Medicine. The Healthcare Imperative: Lowering Costs and Improving Outcomes. Washington, DC: National Academies Pr; 2010.

WHY SHOULD WE CARE?

Why Should We Care?

• The Impact on:– The United States–UAB–Our Patients

United States Impact

• 2010 Health Care– $2.6 Trillion – 18% of GDP – $8402 per person

in US

California Health Care Almanac: Health Care Costs 101, August 2012

United States Impact

PERSONAL IMPACT TO PATIENTS

An Uninsured Patient’s Perspective

• Comedian Julian McCullough discusses his experience with health care in the US as an uninsured individual

• This American Life (NPR) (#439) – “Split a Gut”

Bankruptcy and Medical Bills

• Medical bills are the leading cause for personal bankruptcy in the US (62% in 2007)

• 78% bankruptcies caused by medical problems had medical insurance at the start of their illness

• Most medical debtors were well educated, owned homes, and had middle-class occupations

Himmelstein DU, et al. Am J Med 2009; 122:741

Case 2• Emilia Gilbert (school bus driver)• Bridgeport Connecticut June 2008• Slipped and fell on face• ER: 3 CT scans, blood work, exam• Diagnosis: hairline fracture of nose• Bill: $9,400• Insurance coverage $2,500 per visit• Her bill: $7,000

Brill, S. Bitter Pill: Why Medical Bills are Killing Us. Time Magazine, 2013.

Case 1

• Summer 2012 in Connecticut• Janice develops chest pain• 64 yo former sales clerk, uninsured• Taken via ambulance to Stamford Hospital• 3 hours later…CP = Heartburn = good news• Bad news = Bill $21,000

Brill, S. Bitter Pill: Why Medical Bills are Killing Us. Time Magazine, 2013.

Billing Terms• Charge• Contractual adjustment• Patient Responsibility• Cost• Medicare allowable cost

• 2004 Average charge/cost ratio 3.071

1. Anderson, G. From 'Soak The Rich' To 'Soak The Poor': Recent Trends In Hospital PricingHealth Affairs, 26, no.3 (2007):780-789

All Insurance is Not Created Equal for Patients

Patient Responsibility Traditionally defined as: Deductibles

Amount patient must pay for health care or prescriptions before prescription drug plan, or insurance provider begins to pay.

Co-paymentsAn amount you may be required to pay as your share of the cost for a medical service or supply, like a doctor's visit, hospital outpatient visit, or prescription.

Co-insuranceAn amount you may be required to pay as your share of the cost for services after you pay any deductibles.

All Insurance is Not Created Equal for Patients

Example:2 patients admitted January 2013:

Patient A possessed BCBS of Alabama insurance; and

Patient B was eligible for full charity care

Patient A – BCBS Patient B – Full Charity

Length of Stay 1 5

Total Charges $ 16,137 $ 46,563

Deductible $ 768 $ 0

Co-payments $ 301 $ 0

Co-insurance $ 0 $ 0

Patient Responsibility – Recent Accounts

• BC Inpatient, LOS 4 Days– Charges $25,344, Ins Payment $16,653, Patient $800

• BC Outpatient, LOS 1 Day– Charges $16,352, Ins Payment $2,123, Patient $1,104

• Medicare Advantage, LOS 1 Day– Charges $8,114, Ins Payment $3,813, Patient $159

• Charity, LOS 5 Days– Charges $48,564, no payment

• Medicaid, LOS 13 Days– Charges $232,360, Ins Payment $25,345, No Patient Responsibility

UAB University Hospital data: FY 2012

Patient Status Impacts Payment Due

ACP and AAIM 2012

• Change from IP to OP impacts patient co-payments and satisfaction– Patients often have higher out-of pocket costs as

outpatients– Outpatients must pay for self-administered drugs

• IP status requires meeting medical necessity – Documentation of all risk factors for the patient helps

support medical necessity

Affordable Care Act Health Plan Categories

Health Plan % of health expenses covered

Platinum 90%

Gold 80%

Silver 70%

Bronze 60%

Catastrophic Restricted to <30yo

Askin E, Moore M. The Heathcare Handbook. 2012, 201.

Hospital Billing

• Insert flow diagram of your hospital’s billing and collection

Opportunity Cost of Unnecessary Care

Unnecessary Days of Care: Patients in greater need of care may not be admitted because of diversion

Unnecessary Services: Resources are diverted that could have been directed to areas of greater need.

UAB Benefit from Cost Conscious Care

People:Ability to utilize additional dollars to employ additional UAB Medicine resources.

Process:Ability to identify and remediate process improvement opportunity to more effectively allocate UAB Medicine resources.Technology:Ability to evaluate and purchase technology that promotes work flow optimization, charge capture and compliance allowing UAB Medicine to effectively and efficiently direct patient care activities.

ACP and AAIM 2012

Impact to Patients

• Financial • Emotional• Physical

Summary• Goal = Reduce Healthcare Waste

• Because:• Our Country• Our Workplace• Our Patients

• But How?

What can we do about it here at UAB?

• Review appropriate tests for common presentations• What are the consequences of not ordering the test? • What is the possible harm of the test?• Who will follow it up? • Can it wait for rounds to discuss? Is it urgent? • What are the chances of different results if you are

repeating the test?

ACP and AAIM 2012

What can we do about it here at UAB?

• Why are we ordering the test?• Has it been done before?• Will it change management or provide any other

helpful information? • Am I ordering it only because the patient wants it?

• My attending wants it?• Consultants want it?

• Is there a cheaper medication that is just as good?

ACP and AAIM 2012

QUESTIONS AND COMMENTS?