UHC Study: Target Patients Who Account for a Disproportionate Share of Health Care Spending to Improve Health Care

CHICAGO, March 9, 2015 /PRNewswire/ -- Broad population health initiatives, including wellness programs, preventive measures, and early detection, have unquestionable social value and improve quality of life. According to a new UHC study, however, the key to containing rising health care costs is not these broad initiatives, but the delivery of more efficient episodes of care to the small subset of the population that suffers from advanced chronic and complex illnesses. UHC, an alliance of the nation's leading nonprofit academic medical centers, conducted the study to determine how best to contain health care spending.

"In 2010, the sickest 10% of Americans spent an average of $26,851 in health care costs per person, while the healthiest 50% spent less than $250 per person," said Tom Robertson, executive vice president, Member Relations and Insights, citing survey data from the Agency for Healthcare Research and Quality.

The UHC study found that 42% of all health care spending among the commercially insured population arose from unpredictable and largely unavoidable single events such as appendectomies or injuries. Another 31% of total spending was incurred by the small subset of the population that suffers from advanced chronic and complex illnesses such as congestive heart failure or cancer.

Using commercial insurance claims data and standardized unit prices, UHC found a 50% variation in costs for newly diagnosed lung cancer episodes. The variation was completely attributable to:

• Differences in the utilization of chemotherapy, radiation therapy, and major imaging;
• A five-fold difference in the percentage of patients with stage IV cancer who undergo surgery;
• Inconsistent use of palliative care and hospice services.

Using Medicare claims data, the UHC study found that median total episode costs for patients who received over 80% of their lung cancer treatment from an academic medical center were 25% lower than the episode costs for a similar cohort of patients treated predominantly in community hospitals. This suggests that the lower costs may be a result of the multidisciplinary nature of academic medical centers and increased adherence to evidence-based standards of care. Further study is needed to test that hypothesis.

The study concluded that lung cancer costs would be reduced by as much as 40% --or over $50,000 per patient --if high-cost markets adopted the utilization patterns observed in low-cost markets.

"Although wellness programs have great value, they will not reduce health care spending by enough to make the system affordable," said Robertson. "Any programs or policies designed to curb health care spend must focus on improving the efficiency of complex episodes of care delivered to the sickest subset of the population."

Robertson says there are significant opportunities to reduce costs by focusing on the small subset of the population that incurs most of the spending.

The full study will be published in the March 2015 print issue of Academic Medicine.View a short video on the ways to improve the health care costs at http://tinyurl.com/UHCdoingwell.

For more information about UHC's Research Institute visit www.UHC.edu/Research-Institute. 

About UHC

UHC is an alliance of the nation's leading nonprofit academic medical centers, which are focused on delivering world-class patient care. Formed in 1984 and based in Chicago, UHC fosters collaboration with and among its 117 academic medical center and 329 affiliated hospital members through its renowned solutions in the areas of performance improvement, comparative data and analytics, supply chain management, strategic research, and public policy. UHC helps its members achieve excellence in quality, safety, and cost-effectiveness. UHC's membership includes the leading nonprofit academic medical centers in the United States. For more information, visit uhc.edu.

SOURCE UHC

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