COST CONSCIOUS CARE
Why?
HOW MUCH HEALTHCARE WASTE IS
THERE?
Health Care Waste
• 2010: $2.6 Trillion in Healthcare Costs in US
– 30% ($765 Billion) = Waste
• $395 Billion = Physician Controlled Waste
– $210 billion = Unnecessary services
– $130 billion = Inefficient care delivery
– $55 billion = Missed prevention
opportunity
Institute of Medicine. The Healthcare Imperative: Lowering Costs and Improving Outcomes.
Washington, DC: National Academies Pr; 2010.
WHY SHOULD WE CARE?
Why Should We Care?
• The Impact on:
– The United States
– UAB
– Our Patients
United States Impact
• 2010 Health Care
– $2.6 Trillion
– 18% of GDP
– $8402 per person
in US
California Health Care Almanac: Health Care Costs 101, August 2012
United States Impact
PERSONAL IMPACT TO PATIENTS
An Uninsured Patient’s Perspective
• Comedian Julian McCullough
discusses his experience with health
care in the US as an uninsured
individual
• This American Life (NPR) (#439)
– “Split a Gut”
Bankruptcy and Medical Bills
• Medical bills are the leading cause for personal
bankruptcy in the US (62% in 2007)
• 78% bankruptcies caused by medical problems had
medical insurance at the start of their illness
• Most medical debtors were well educated, owned
homes, and had middle-class occupations
Himmelstein DU, et al. Am J Med 2009; 122:741
Case 2
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Emilia Gilbert (school bus driver)
Bridgeport Connecticut June 2008
Slipped and fell on face
ER: 3 CT scans, blood work, exam
Diagnosis: hairline fracture of nose
Bill: $9,400
Insurance coverage $2,500 per visit
Her bill: $7,000
Brill, S. Bitter Pill: Why Medical Bills are Killing Us. Time Magazine, 2013.
Case 1
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Summer 2012 in Connecticut
Janice develops chest pain
64 yo former sales clerk, uninsured
Taken via ambulance to Stamford Hospital
3 hours later…CP = Heartburn = good news
Bad news = Bill $21,000
Brill, S. Bitter Pill: Why Medical Bills are Killing Us. Time Magazine, 2013.
Billing Terms
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Charge
Contractual adjustment
Patient Responsibility
Cost
Medicare allowable cost
• 2004 Average charge/cost ratio 3.071
1. Anderson, G. From 'Soak The Rich' To 'Soak The Poor': Recent Trends In Hospital Pricing
Health Affairs, 26, no.3 (2007):780-789
All Insurance is Not Created Equal for Patients
Patient Responsibility Traditionally defined as:
 Deductibles
Amount patient must pay for health care or prescriptions before
prescription drug plan, or insurance provider begins to pay.
 Co-payments
An amount you may be required to pay as your share of the cost for a
medical service or supply, like a doctor's visit, hospital outpatient visit,
or prescription.
 Co-insurance
An amount you may be required to pay as your share of the cost for
services after you pay any deductibles.
All Insurance is Not Created Equal for Patients
Example:
 2 patients admitted January 2013:
 Patient A possessed BCBS of Alabama insurance; and
 Patient B was eligible for full charity care
Patient A – BCBS
Length of Stay
Patient B – Full
Charity
1
5
Total Charges
$
16,137
$
46,563
Deductible
$
768
$
0
Co-payments
$
301
$
0
Co-insurance
$
0
$
0
Patient Responsibility – Recent
Accounts
• BC Inpatient, LOS 4 Days
– Charges $25,344, Ins Payment $16,653, Patient $800
• BC Outpatient, LOS 1 Day
– Charges $16,352, Ins Payment $2,123, Patient $1,104
• Medicare Advantage, LOS 1 Day
– Charges $8,114, Ins Payment $3,813, Patient $159
• Charity, LOS 5 Days
– Charges $48,564, no payment
• Medicaid, LOS 13 Days
– Charges $232,360, Ins Payment $25,345, No Patient Responsibility
UAB University Hospital data: FY 2012
Patient Status Impacts Payment Due
• Change from IP to OP impacts patient copayments and satisfaction
– Patients often have higher out-of pocket costs as
outpatients
– Outpatients must pay for self-administered drugs
• IP status requires meeting medical necessity
– Documentation of all risk factors for the patient helps
support medical necessity
ACP and AAIM 2012
Affordable Care Act Health Plan
Categories
Health Plan
% of health expenses covered
Platinum
90%
Gold
80%
Silver
70%
Bronze
60%
Catastrophic
Restricted to <30yo
Askin E, Moore M. The Heathcare Handbook. 2012, 201.
Hospital Billing
• Insert flow diagram of your hospital’s billing
and collection
Opportunity Cost of Unnecessary Care
Unnecessary Days of Care:
Patients in greater need of care may not be admitted because
of diversion
Unnecessary Services:
Resources are diverted that could have been directed to areas
of greater need.
UAB Benefit from Cost Conscious Care
People:
 Ability to utilize additional dollars to employ additional UAB
Medicine resources.
Process:
 Ability to identify and remediate process improvement
opportunity to more effectively allocate UAB Medicine
resources.
Technology:
 Ability to evaluate and purchase technology that promotes
work flow optimization, charge capture and compliance
allowing UAB Medicine to effectively and efficiently direct
patient care activities.
ACP and AAIM 2012
Impact to Patients
• Financial
• Emotional
• Physical
Summary
• Goal = Reduce Healthcare Waste
• Because:
• Our Country
• Our Workplace
• Our Patients
• But How?
What can we do about it here at UAB?
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Review appropriate tests for common presentations
What are the consequences of not ordering the test?
What is the possible harm of the test?
Who will follow it up?
Can it wait for rounds to discuss? Is it urgent?
What are the chances of different results if you are
repeating the test?
ACP and AAIM 2012
What can we do about it here at UAB?
• Why are we ordering the test?
• Has it been done before?
• Will it change management or provide any
other helpful information?
• Am I ordering it only because the patient wants
it?
• My attending wants it?
• Consultants want it?
• Is there a cheaper medication that is just as
good?
ACP and AAIM 2012
QUESTIONS AND COMMENTS?