Medicare and Low-value Care

By April 17, 2017Commentary

There is a group that claims our health spending issues could be resolved if we just eliminated unnecessary and inappropriate care.  I have made state my opinion on that idea and the wildly inflated claims of savings before.  The staff of the Medicare Payment Advisory Commission made a presentation on low-value care paid for by Medicare at the recent public meeting.   (MedPAC Pres.)  The staff defined low-value care as that which has little or no clinical value and the risk of harm outweighs any potential benefit.  The potential harm to the patient may be directly from the service or indirectly from tests and procedures which follow the low-value service.  The staff used 2014 Medicare claims data to analyze how many of these services Medicare paid for.  Low-value services were those from a common list used in research, with two level variations, one that captured a greater volume of services and one a lower.

In 2014 by the broad level standard, 37% of beneficiaries had at least one low-value service and the rate was 72 such services per 100 beneficiaries.  By the narrow standard, 23% of beneficiaries had one such service, at a rate of 34 per 100 beneficiaries.  Under the wide standard, Medicare spent $6.5 billion on these services and under the narrow standard, $2.4 billion.  Compared to 2012 and 2013, use of such low-value services in 2014 was down slightly.  Imaging, screening and certain cardiovascular and other procedures accounted for many of these services.  The staff estimates that the actual rate is higher, since the measures used don’t cover all low-value care.  And they found significant geographic variation in rates of use of low-value care.  Places with lots of retirees tended to have higher rates.  ACOs appeared to reduce the amount of low-value care.  Obviously we would like to avoid any unnecessary or low-value care.  But the results of this analysis make it clear that the amount of savings is nowhere near the 30% of all spending that people sometimes claim.

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.

More posts by Kevin Roche

Leave a Reply