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 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 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 Charge Contractual adjustment Patient Responsibility Cost Medicare allowable cost 2004 Average charge/cost ratio Anderson, G. From 'Soak The Rich' To 'Soak The Poor': Recent Trends In Hospital Pricing Health Affairs, 26, no.3 (2007):

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 Patient B – Full Charity Length of Stay 1 5 Total Charges$ 16,137$ 46,563 Deductible$ 768$ 0 Co-payments$ 301$ 0 Co-insurance$ 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 ACP and AAIM 2012 Change from IP to OP impacts patient co- payments 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

Affordable Care Act Health Plan Categories Health Plan% of health expenses covered Platinum90% Gold80% Silver70% Bronze60% CatastrophicRestricted 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? 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?