Sunday, August 07, 2011

Less Healthcare Could Be Better For Us

The previous post explained how high prices for healthcare services are a major cause of high health insurance costs both in Pittsburgh and other regions. But healthcare costs in the Pittsburgh Region are also high because we hospitalize people more often than any major region in the country.

The most comprehensive national information about utilization of healthcare services comes from Medicare data on senior citizens. In 2007 (the most recent data available), the Dartmouth Atlas of Health Care reported that Medicare beneficiaries in the Pittsburgh Region who had chronic diseases such as asthma, diabetes, emphysema, and heart failure were hospitalized at the highest rate among the 40 major regions in the country. Chronic disease patients here are hospitalized 50% more often than the national average.

Medicare beneficiaries in our region also underwent surgery at the fourth highest rate among the top 40 regions —10% more often than the national average. Pittsburgh seniors had 23% more heart valve replacements, 14% more heart bypass operations, and 8% more back surgeries than seniors in the rest of the country.

This dramatically higher amount of hospital care is not due to people being older or sicker in Pittsburgh than in other regions, and it’s unlikely that Pittsburgh seniors have both weaker hearts and more bad backs than seniors in the rest of the country. In fact, when Dartmouth Atlas researchers adjusted for differences in age, sex, race, and Medicare payment rates across regions, Pittsburgh ranked #1 in the nation in Medicare spending for hospitals and skilled nursing facilities in 2008.

Younger people are also going to the hospital more often here than in other regions. A 2010 study by the actuarial firm Milliman found that for commercially-insured individuals, the Pittsburgh Region had 6% more hospital admissions and 26% more emergency room visits than the national average. We had one of the highest rates of emergency room utilization among 33 regions they analyzed.

High rates of hospitalizations, surgeries, and emergency room use are not only expensive, they’re signs that the region’s healthcare systems aren’t functioning efficiently or effectively:

•Many of the chronic disease patients who are being hospitalized today could stay healthier and avoid the need for hospitalization through better primary care and patient support services. A great place to start is by reducing readmissions – Pennsylvania Health Care Cost Containment Council data show that 23% of the chronic disease patients in Pittsburgh who are hospitalized end up back in the hospital in less than a month. These high readmission rates can be significantly reduced; for example, projects organized by the Pittsburgh Regional Health Initiative at UPMC St. Margaret and at Premier Medical Associates showed that improving care for chronic disease patients can reduce readmission rates by 40% or more.

•Although it’s great that we have access to excellent surgeons and hospitals when we need them, national studies have shown that many types of major surgery, such as heart surgery, back surgery, and Cesarean sections, are being performed on many patients who don’t really need them. For example, in our region, a review earlier this year found 200 cases of unnecessary coronary stent implants at Excela Health in Greensburg. Studies have shown that when physicians take time to review all the options with patients, the patients choose surgery far less frequently.

It would be one thing if Pittsburgh residents were healthier as a result of all of this hospital care, but they’re not. Pittsburgh had the 11th highest death rate for Medicare recipients among the top 40 regions, and nearly one out of every 50 people hospitalized in the Pittsburgh Region gets an infection during their hospital stay. National studies have shown that regions with high rates of hospital utilization tend to have worse outcomes for patients.

Our overuse problem primarily occurs in hospitals, not in the rest of the healthcare system. In fact, our region ranks below the national average in spending on physician services for both Medicare beneficiaries and commercially-insured patients. Although we have 12% more hospital beds and 19% more hospital employees per capita than the national average, we have 5% fewer primary care physicians and 3% fewer specialists.

What this means is that in order to reduce our health insurance costs, we’re going to need to stop spending so much on hospitals and invest more in primary care and wellness initiatives.

How can we do that? First, physicians need to take the leadership to reinvent the way healthcare is provided so their patients can stay well and stay out of the hospital, rather than forcing health plans and Medicare to cut fees (which underpays physicians and hospitals for needed care) or to create bureaucratic prior authorization systems (which can delay or deny needed care), or allowing hospitals try and put each other out of business in order to keep filling their own beds. Only physicians, who know their patients and what they really need, can ensure costs are reduced in ways that are actually better for patients.

Second, we need to change the way we pay for health care. Today, doctors and hospitals get paid more when patients are hospitalized more often, rather than being rewarded for keeping patients well. There are better ways to pay for health care that give physicians greater flexibility over the care their patients receive as well as greater accountability for outcomes and costs (you can learn about them at ), but unfortunately, the health plans in our region have not yet implemented them.

Would reducing the overuse of hospital care hurt the region’s economy? Spending less money on the expensive drugs and medical devices used in hospitals and spending more on primary care could actually boost the local economy by keeping more of the healthcare dollars we do spend inside the region, making our workforce healthier and more productive, putting more dollars into workers’ wallets that they can spend locally, and encouraging new businesses and residents to locate here.

Clearly, creating a higher-quality, lower-cost healthcare system should be one of the region’s highest economic development priorities.

(A version of this post appeared as the Regional Insights column in the Sunday, August 7, 2011 Pittsburgh Post-Gazette.)


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