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GAO on the Value of Health Spending

By August 3, 2011Commentary

Following yesterday’s post on projections for national health expenditures, we thought it might be interesting to look at the recent Government Accounting Office report on the value of health spending.   (GAO Report) GAO did the study at Congress’ request to help it understand what interventions might be most effective in increasing value, defined as better quality and lower cost.   The backdrop is obviously our very high level of spending which is not correlated with consistent high quality.  Among the government and private value-enhancement initiatives which GAO examined were those that restructured care processes, changed provider payment mechanisms and motivated patients to be more involved in their care.  The report focused on 239 interventions, reviewing the research literature on those, and obtaining survey data from the researchers on about half of those interventions.

After reviewing principals of methodological rigor, GAO found that most of the interventions did not have strong evidence of either improving quality or lowering costs and very few even attempted to identify net cost savings, i.e. those present after accounting for the cost of the intervention.  In addition, many of the studies on the interventions did not meet requirements to show that the intervention would have the same results in a broader population or that the results would be consistently replicable.  The report did identify seven factors which might facilitate or impede the effectiveness of an intervention, including leadership, staff resources, organizational culture,, tools and other non-financial, non-staff resources, financial resources, financial incentives and health IT.

Of these factors, the survey respondents said leadership was the most important and financial incentives the least.  Health IT had the most mixed rating, with many respondents finding that it actually impeded making an intervention effective.  Unfortunately, the report and its appendices do not actually list the interventions studied and the research reviewed.  Interestingly, GAO says it requested comments from Health & Human Services but got none.  Probably too embarrassed as evidence mounts that the wild initiative and spending binge on quality has done little to nothing to improve outcomes or lower costs.  While it is a slower process, it might be best to test a variety of interventions first, then pass laws and promulgate rules to mandate their use, as opposed to vice versa.

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