The Executive Suite: Medical costs need to be prioritized in patient care plans

Friday, August 2, 2024

Medical costs need to be prioritized in patient care plans

In 2012, the American Board of Internal Medicine launched the Choosing Wisely campaign to drive conversations between clinicians and patients about what tests are needed and which are not. Across nine specialty societies representing almost 375,000 clinicians with 45 tests or treatments commonly prescribed but lacking supporting evidence, the Choosing Wisely campaign outlined ways to reduce the overuse of unnecessary services and ultimately improve patient outcomes. Over-treatment or low-value care represents approximately $75 to $100 billion in wasteful spending annually. Addressing this type of wasteful spending could result in $15 to $30 billion in savings to the healthcare system.

The Choosing Wisely campaign presented five questions that patients should ask their doctor before they get any test, treatment, or procedure, as seen below. The campaign has been successful in sparking new conversations, but the campaign and its associated questions have changed since its initial publication.

Healthcare costs have risen significantly. The average annual premium for family coverage in 2012 was $15,745; in 2024, it’s nearing $24,000. The average out-of-pocket spending has grown to over $900 compared to $600 in 2012. In addition to the unsustainable cost burden growth placed upon families and individuals, there have been some transformative regulations and changes. These changes, notably the Transparency in Coverage Rule and the Consolidated Appropriations Act of 2021, have placed healthcare price transparency as a foundational requirement for healthcare consumers. Specifically, employees must be equipped with an internet-based cost-comparison shopping tool that highlights their expected out-of-pocket exposure based on their plan design, deductibles, accumulators, and network arrangements before receiving care.

As a result, the Choosing Wisely campaign questions, though still applicable to today’s healthcare environment, must start with: “How much does it cost?”

This question, previously unknowable by healthcare consumers, can now be addressed, enabling patients to navigate their healthcare journey confidently. Between in-network providers, a 10x to 20x price variation exists for the same procedure, regardless of quality or accessibility. A standard procedure with minimal variation in quality consideration or physician proficiency, like a knee MRI, can cost patients anywhere from $300 to $2,000. Given the answer, patients can search for more cost-effective providers and work collaboratively with their physicians for the necessary care. Currently, 4 in 10 patients avoid essential care because of the potentially high costs and financial burden. This results in a more sick patient population and higher future costs.

Empowerment is a key theme in the fight against wasteful spending. By combining the lenses of both clinical and cost perspectives, patients and their physicians can play a pivotal role in addressing and reducing a significant amount of wasteful spending within the healthcare system. The combination of over-treatment, low-value care, and pricing failure is currently a huge source of waste, amounting to $305 to $340 billion. When addressing these two sources effectively and efficiently, $94 to $120 billion could be saved. This is not just a theoretical possibility, but a tangible opportunity for patients to take control of their healthcare journey and contribute to the delivery of higher-value care.