Use of “Low-value” Services

By September 14, 2016Commentary

Wild numbers continue to be thrown around about the amount of waste and inappropriate spending in the United States.  Many of these stem from a Milliman study which claimed that if its care guidelines were universally followed, spending would be reduced by hundreds of billions annually.  That is simply absurd.  And if our concern is to ensure we are only spending for appropriate care, you would have to offset any savings with the additional cost of services that people need but don’t currently receive.  A new study published in JAMA Internal Medicine uses a large commercial health plan data base to attempt to identify use of “low-value” health services, which is one component of unnecessary spending.  (JAMA Internal Medicine Article)   Using data for 2013 for adults aged 18 to 64, the researchers identified 28 previously established low-value services and evaluated how often those services were used in the study population.  Of the roughly 1.5 million adults included in the study, about 8% received a low-value service during the year.  The total cost of these was around $33 million or $22.30 per person.  My math’s not great but that seems like with about 200 million adults in the US, we might save around $4.5 billion a year by eliminating use of these services.  Meaningless in the big picture.

The most commonly misused services include triiodothyronine measurement for hypothyroidism, imaging for low back pain and imaging for uncomplicated headache.  Recipients of low-value services tended to less often be male, older, black or Asian, low-income and enrolled in a consumer-directed health plan.  These generally make sense, particularly the fact that low-income and CDHP enrollees are financially incented to avoid both unnecessary and necessary services.  But the main lesson from this study is that however you define inappropriate services, it is very unlikely that the amount of money to be saved is anywhere near the several hundred billion posited by some studies.

Kevin Roche

Author Kevin Roche

The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry through Roche Consulting, LLC. Mr. Roche is available to assist health care companies through consulting arrangements and may be reached at khroche@healthy-skeptic.com.

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