The Importance of Addressing Low Value Care and Wasteful Spending in our Healthcare System Today

There is great debate today about how to properly value healthcare interventions, including the medicines that my company develops. These decisions have important implications for what treatments Americans pay for, how much we pay, and the sustainability of incentives for future investment. Sometimes lost in the debate, is the ongoing discussion in the medical community around the many healthcare interventions with very low or no clinical value for some patients. Despite this consensus, we continue to use these services and pay for them. Wouldn’t it make sense to eliminate this wasteful spending from our healthcare system, freeing-up resources for services that are of clinical value? Such a reallocation away from unambiguously low-value care towards evidence-based care is good policy, regardless of which framework is ultimately used to assess high-value innovations.

This sounds like common sense, but implementing such actions has proven difficult. A number of recent efforts have focused on identifying low- and no-value care. Perhaps the most notable is the Choosing Wisely campaign launched in 2012 by the American Board of Internal Medicine Foundation and Consumer Reports. This effort has involved more than 70 medical specialty societies each identifying at least five commonly overused services. Each society created a list providing recommendations to clinicians for discussing the appropriateness of these services with their patients. Since that time, more than 500 Choosing Wisely recommendations have been released.

Examples of services that should be discouraged include: imaging for low back pain within the first six weeks if there are no red flags present, annual electrocardiograms (EKGs) or any other cardiac screening for low-risk patients without symptoms, and the use of antibiotics for apparently viral respiratory illnesses. A number of analyses suggest that the dissemination of the recommendations has had only a modest impact on reducing instances of low-value care, and it has become clear that payer adoption of both patient-facing and provider-facing strategies will be necessary to really change care patterns for the better.

Clinical waste has a big impact on payers. A recent analysis by the Medicare Payment Advisory Commission (MedPAC) estimated Medicare alone spent between $2.4 and $6.5 billion on 31 low-value services delivered to fee-for-service beneficiaries in a one-year period. Analyses specific to other private and public payers consistently show similarly high levels of low-value care provision. One well publicized study by Berwick and Hackbarth estimated that overutilization cost the U.S. healthcare system between $158 billion and $226 billion in one year alone.

It’s also critical to recognize that clinical waste may harm patients too. There is potential for direct physical harm, such as exposure to medical radiation or side effects from unnecessary procedures. In addition, given the prevalence of high-deductible plans, substantial out-of-pocket financial costs may be a negative consequence as well.

If medical experts generally agree on what care is low- and no-value, it’s natural to wonder why providers continue to deliver these services five years after the first Choosing Wisely recommendations were broadly disseminated. Some factors that explain the challenges include the complicated dynamics at play when a provider interacts with a patient, the knowledge gaps and biases that can affect physician decision making and the misaligned incentives that provide financial rewards for more care rather than less. Perceived risks of malpractice liability and patient expectations are also a powerful driver in administering low value or unnecessary services.

Because guidelines alone are not enough to change medical practice, payers have an important role to play in reducing low-value care. The Low-Value Care Task Force, of which Pfizer is a member, is actively exploring the effectiveness of provider-facing payer interventions such as claims processing edits that would prohibit payment for certain services for certain types of patients, or changes to payment rates that would reduce the profitability to providers of certain services. Patient-facing interventions such as value-based insurance designs and prior authorizations are being explored as well.

At Pfizer, we are trying to take action to address low value care. We are a large employer providing health insurance to around 70,000 colleagues and their families in this country, and we are as motivated as any payer to spend our healthcare dollars as efficiently as possible. For that reason, we are applying a new analytic tool to our medical claims to determine the degree to which wasteful healthcare utilization is occurring within our own colleague population. This will enable us to determine whether colleague- and provider-facing interventions are needed. We encourage all payers, both private and public, to consider similar undertakings.

Tremendous healthcare innovations and cures lie ahead. Our ability to afford them tomorrow will be greatly improved if we spend more carefully on the clinical services available today.