New Approach Needed to Cut Medicare Costs: Study

Preventable emergency room visits and hospitalizations are only a small part of the cost of caring for Medicare patients with the highest overall health expenses, a new study shows.

The findings suggest that providing these patients with better outpatient care would do little to lower their total health care costs, the researchers noted. "High and increasing health care costs are arguably the single biggest threat to the long-term fiscal solvency of federal and state governments in the United States," according to background information in the study in the June 26 issue of the Journal of the American Medical Association. "One compelling strategy for cost containment is focusing on the small proportion of patients in the Medicare programs who account for the vast majority of health care spending. We know from prior work that Medicare spending is highly concentrated; 10 percent of the Medicare population accounts for more than half of the costs to the program," the study authors wrote.

"As a result, many interventions targeting high-cost patients have focused on case management and care coordination, aiming to prevent emergency department visits and hospitalizations for conditions thought amenable to improvement through high-quality outpatient management programs," the researchers explained. "The premise behind these and related interventions is that high-quality outpatient care should reduce unnecessary hospitalizations for high-cost patients. However, there are few data on the proportion of inpatient hospitalizations among high-cost patients that are potentially preventable," wrote Dr. Karen Joynt, of the Harvard School of Public Health, and colleagues.

Their analysis of 2009 and 2010 data from 1.1 million Medicare patients found that the 10 percent of patients with the highest costs were older, more often male and more often black. This group of patients accounted for 33 percent of emergency department costs and 79 percent of hospitalization costs, according to a journal news release. Within this high-cost group of patients, 42 percent of emergency department visits and nearly 10 percent of hospitalizations were deemed preventable. The most common reasons for preventable hospitalization in high-cost patients were congestive heart failure, bacterial pneumonia and chronic obstructive pulmonary disease (COPD), the investigators found. The study was released early to coincide with the planned Monday presentation of the research at the AcademyHealth annual research meeting in Baltimore.

"The biggest drivers of inpatient spending for high-cost patients were catastrophic events such as sepsis, stroke and myocardial infarction, as well as cancer and expensive orthopedic procedures such as spine surgery and hip replacement. These findings suggest that strategies focused on enhanced outpatient management of chronic disease, while critically important, may not be focused on the biggest and most expensive problems plaguing Medicare's high-cost patients," Joynt and colleagues concluded. But even though "improvements to quality are not always substantial cost savers . . . [they] still may be worthwhile," the authors of an accompanying editorial pointed out.

"These findings certainly do not suggest abandoning efforts to reduce preventable emergency department use and hospitalizations," according to Dr. Aaron Carroll, of the Indiana University School of Medicine, and Austin Frakt, of the VA Boston Healthcare System, Boston University Schools of Medicine and Public Health. "Even though avoiding some emergency department use and hospital admissions might not save much money -- and certainly not enough to declare victory in controlling health spending -- preventing such use when possible would be of substantial benefit to patients, both those who would otherwise use these services and those who have their care delayed because of overburdened emergency department and hospital resources," the editorial authors noted.