RAND Cost Saving Estimates, August (MA) and November (US)

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The Mass Division of Health Care Policy and Finance sponsored an impressive review by RAND researchers of potential cost-saving opportunities in Massachusetts, which was published in August. I blogged about this late this summer, and have always felt that this extensive analysis didn't get nearly enough attention.

The NEJM last week published an article by same RAND researchers extending this analysis to the rest of the country.

This remains an important study - and I'm glad to see an extrapolation getting new press.

I'm also intrigued by the differences in findings.

Hospital rate setting: Maximum savings in MA 4%; US 2%
Healthcare IT: Maximum savings in MA 1.8%; US 1.5%; Maximum increase in costs in MA 0.6%; in US 0.8%
Expand scope of practice for NPs and PAs: MA range savings 0.6%-1.3%; US 0.3%-0.5%
Medical home: MA maximum savings 0.9%; US 1.2%
Disease management:  MA maximum savings 0.1%; US maximum savings 1.3%

It makes sense that rate setting might be more effective in Massachusetts to the extent that prices are higher. In fairness, this might not be a 1:1 comparison since the NEJM lumps a few different options together.  Scope of practice savings might be different based on supply of physician and non-physician providers.  I'm surprised to see higher projections of savings for medical home, since our specialist:primary care ratio is high in Massachusetts.  I also can't explain why disease management would have so much higher projected maximum savings in the US overall compared to Massachusetts.

This analytic work is especially important as we consider what cost-control mechanisms should be included in health care reform.

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Retail Clinics Save Money; Patient Centered Medical Home....Does Not (But Improves Quality)

Two studies about innovation in health care delivery were published in the last week.

An excellent study in the September 1 Annals of Internal Medicine examined 700 matched patients seen in retail clinics, physician offices, urgent care centers, and emergency departments who had ear infections, sore throats, and urinary tract infections.  The study showed that retail clinics were substantially less expensive ($110 total cost compared to $156-166 in urgent care and physician offices and $570 in emergency departments).  Three critical concerns about retail clinics are elegantly addressed in this study.

1) Rates of prescribing antibiotics was no higher in the retail clinics. Because these clinics are usually housed in pharmacies, some had worried that nurse practitioners would overprescribe.   This problem is in any event no worse than in conventional medical settings.

2) Quality appeared equivalent (using standardized RAND measures).

3) Patients were no LESS likely to have a preventive service in the following 90 days (and a bit more likely, not reaching statistical significance).  Some physicians have worried that retail clinics will disrupt continuity of care; this article refutes that concern.

This study covered three diagnoses that represent about half of all visits to retail clinics -- and the results are unequivocal.  Retail clinics, a "disruptive innovation" in health care delivery, save money with no sacrifice in quality or continuity.   

Reports on another innovation in health care delivery, the Patient Centered Medical Home, show improved quality with no increase in cost (but without the decrease in costs promised by advocates of patient centered medical homes.)  Group Health Cooperative designated one of its centers as a "patient centered medical home," and determined that compared to other centers, this center had

- Lower staff burnout

- Better patient satisfaction

- More specialist visits

- Fewer emergency department visits

- More web and telephonic visits

- Increased composite quality score

There was no substantial difference in cost of caring for patient; higher costs of primary and specialty care were about equivalent to savings in emergency department.

It's possible that this is a premature report -- we're only looking at a year of data.  This study was performed at Group Health Cooperative, an excellent and progressive group where the 19 control clinics were pretty advanced, and  showed large quality improvements during the study period.  However, GHC chose one of its best clinics as the trial site - so it's disappointing not to see any cost savings.   Reading the case, it's also clear just how much work and investment went into setting up this patient-centered medical home.

We need innovations in health care delivery. Retail clinics save money, with no significant loss of quality, and medical home improves quality without increased cost (but a lot of increased effort).  The hope is to define interventions that will raise quality and lower costs simultaneously.

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The Commonwealth Fund and the Congressional Budget Office recently released competing estimates of the impact of various interventions on the federal deficit. The Commonwealth Fund's report is also explicit about the impact of these initiatives on overall health care costs - which is not the focus of the CBO report. I've pulled out five initiatives
1) Medical Home
2) Accelerate Health Care IT Adoption
3) Estabish a Center for Comparative Effectiveness
4) Increase tobacco tax
5) Place tax on sweetened beverages
The CBO suggests each of these will cause modest increases in the federal deficit, while the Commonwealth Fund analysis (performed by the Lewin Group) sees pretty substantial deficit reduction. The Commonwealth Fund's analysis is more in line with the budget proposed by the Obama administration.

I'm skeptical of the CBO's contention that raising taxes on sweetened beverages and tobacco will actually RAISE the federal deficit slightly. But it's important to note that the CBO's calculation of impact of the Clinton Health Plan on the federal deficit played a role in that plan's defeat. (See "The System" by Broder)

Keep your eyes on the Congressional Budget Office!

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