October 19, 2009 – The numbers, if true, are mind-boggling.
If physicians, drug manufacturers, private insurers and public plans worked together to coordinate and ensure continuity of care for patients, Medicare and Medicaid alone would save an estimated $133.5 billion annually, says a new study by Southeastern Consultants.
Private plans would save an additional $106.6 billion a year, for a total of $240.1 billion in savings, the Florida-based health care consulting and data services firm estimates.
Mary Kay Owens |
“That’s a staggering amount of money because where is the administration trying to get to with the numbers for health care reform?” Mary Kay Owens, president of Southeastern Consultants asked her audience when presenting the study last month at the Annual Medicare Drug Rebate Program Summit in Chicago.
“We think it’s pretty important to get this information to (Washington) so the Congressional Budget Office can score this and say, ‘This is a reasonable way for us to obtain the cost-savings in the system’,” Owens said. “And we don’t have to wait until 2013 to start doing this — we can start it right now.”
Indeed, some innovative health care providers are already working hard to establish such networks, and tapping into the 340B program to lower pharmacy costs.
One such example is Pittsburgh-based Coordinated Care Network, which provides 340B contracted pharmacy and case management services to high-risk patients in Pennsylvania, Ohio, New York and Georgia.
Since its inception in 1996, the organization has served more than 41,000 patients and dispensed more than 1.1 million 340B medications.
Duplication, disorganized care cost billions
But to hear Owens describe it, such initiatives have only scratched the surface.
Southeastern Consultants analyzed more than 330 million claims filed by 9 million Americans in five large states to try to quantify what poorly coordinated care costs the nation.
Typical examples of uncoordinated care included patients using multiple prescribers and pharmacies to obtain medication to treat a single condition, patients using the emergency room as a primary care facility, excessive and uncoordinated use of narcotics, duplicate use of drugs in the same classes of drugs, and patients changing drugs with different prescribers.
Source: Southeastern Consultants, Inc. |
The results of the study shows that while “extreme” cases of uncoordinated care only account for about 10 percent of patients, they swallow about 30 percent of all medical costs, 45 percent of all drug costs, and 32 percent of total plan costs, Owens said.
At least 10 percent of direct-care costs can be saved if the care for such patients is synchronized through the exchange of health information data, personalized coordinated care through so-called medical homes, or other strategies aimed at reducing waste and improving outcomes, she said.
Southeastern Consultants recently visited state and congressional offices to present its data, adding to the growing body of evidence showing how poor patient management adds to the nation’s soaring health care costs. And lawmakers seem to have taken notice.
Legislation under way
The health care reform bill that Senate Finance Committee Chairman Max Baucus (D-Mont.) released last month calls for a system that moves toward “patient-centered care” for chronically ill Medicaid patients. The bill rewards states that create medical homes — a system where providers collaborate to provide each patient with comprehensive care and referrals to community-based programs and social services.
And an amendment to the House bill, introduced by Rep. Bobby Rush (D-Ill.), would establish collaborative care networks serving poor uninsured or underinsured patients. Safety-net hospitals and federally qualified health centers that serve a large number of low-income patients would be allowed to participate in such networks and tap into federal grants.
Safety-net providers that have already scored some successes with their coordinated care programs say they’d welcome some support from Uncle Sam.
The VCU Health System, for example, created a program dubbed the Virginia Coordinated Care for the Uninsured in 2000 in an effort to serve its most vulnerable patients better. Its list of goals includes the creation of a “community-based medical home” that educates and provides better outcomes for patients. Today, the Richmond-based hospital attributes a drop in emergency visits — from 892 per 1,000 patients in 2002 to 830 in 2008 — in part to its coordinated care program.
But in a recent presentation to the National Association of Public Hospitals and Health Systems (NAPH), VCU Health Systems’ Chief Executive Sheldon Retchin noted that Virginia Coordinated Care for the Uninsured, now serving more than 20,000 patients, has also strained hospital resources.
A new paradigm for health care
Without federal support or a clear roadmap for how to build such networks, existing collaborative care initiatives cannot fully meet patient needs, notes NAPH, which helped push for the Rush amendment.
By making coordinated care networks an official part of reform legislation, providers “would not need to create such networks from scratch, but would instead be able to qualify for an established federal designation,” NAPH wrote in a recent position paper.
Owens, who is also an affiliate professor at the University of Florida’s College of Pharmacy, said that by digging deeper into patient behavior and focusing coordinated care efforts in areas where they pay off the most, the nation could turn its health care system around. But it requires all parties, from drug makers to insurance plans, to join forces, she said. “It’s time for everybody to be held accountable,” Owens said.