Frail elderly patients comprise 44% of potentially preventable Medicare spending
Frail senior citizens represent 44 percent of the Medicare spending that could be preventable, even though they account for only 4 percent of Medicare beneficiaries, according to the Harvard T.H. Chan School of Public Health. High-need, high-cost patient spending could be preventable. The researchers tried to identify non-essential spending across six types of “high-cost” patient, or those that are in the highest 10 percent of standardized individual spending. These types include the nonelderly disabled; the frail elderly; the simple chronic, the minor complex chronic, the major complex chronic and the relatively healthy. The study examined fee-for-service claims in 2012 from across 6,112,450 high-cost Medicare recipients. Potentially preventable spending was calculated using the Billings algorithm, and found that the proportion of spending that could be prevented was 4.8 percent, with 73.8 percent.of that amount caused by high-cost patients. Frail elderly persons represented 43.9 percent of total potentially preventable spending, at a value of around $6,593 per patient. Most of the total expenditure spent on urinary tract infections, heart failure, dehydration and bacterial pneumonia admissions was spent on this group. A value-based framework could benefit Medicare, given that it could resolve many of these high-cost issues. The Harvard team concluded that health care culture needed to shift rapidly towards value-based care, as well as collecting new data and forming treatment planning that focuses on social determinants of health and patients’ function. The team also recommended a new payment and patient assignment model be implemented.

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Frail elderly patients comprise 44% of potentially preventable Medicare spending

High-cost frail elderly individuals accounted for 44% of total potentially preventable Medicare spending, despite only comprising 4% of the Medicare population, according to findings published in Annals of Internal Medicine.

“For clinical leaders, finding areas of care where money can be saved and quality improved is an imperative but has often proved difficult,” Jose F. Figueroa, MD, MPH, from Harvard T.H. Chan School of Public Health, and colleagues wrote.

“One approach that has received substantial attention recently has been focusing on high-need, high-cost patients. By definition, this population is very expensive to care for; however, we know less about whether their spending is preventable,” they wrote.

Figueroa and colleagues sought to identify potentially preventable total spending across six distinct subpopulations of “high-cost” patients, or those in the highest 10% of total standardized individual spending: nonelderly disabled, frail elderly, major complex chronic, minor complex chronic, simple chronic and relatively healthy. The researchers reviewed fee-for-service claims from 2012 for 6,112,450 high-cost Medicare beneficiaries.

They calculated potentially preventable spending using the Billings algorithm and inpatient and associated 30-day post-acute costs for ambulatory care-sensitive conditions to sum costs for avoidable ED visits. Then, Figueroa and colleagues compared the amount and proportion of potentially preventable spending across the high-cost subpopulations, as well as individual ambulatory care-sensitive conditions.

The researchers found that the proportion of Medicare spending that was potentially preventable was 4.8%, most of which (73.8%) was incurred by high-cost patients. Only 4% of the Medicare population consists of high-cost frail elderly persons; however, they accounted for 43.9% of total potentially preventable spending ($6,593 per person). Nearly 15% ($3,421 per person) and 11.2% ($3,327 per person) of potentially preventable spending was attributed to the high-cost nonelderly disabled group and the major complex chronic group, respectively. Most spending for urinary tract infections, dehydration, heart failure and bacterial pneumonia admissions was incurred by frail elderly individuals.

“We found large variations in potentially preventable spending across Medicare subpopulations,” Figueroa and colleagues concluded. “Frail elderly persons were at particularly high risk for incurring potentially modifiable costs. Therefore, as we continue to move toward value-based frameworks, interventions that focus on frail elderly patients may be particularly valuable.”

In an accompanying editorial, Bruce Leff, MD, from Johns Hopkins University School of Medicine, and Arnold Milstein, MD, from Stanford University School of Medicine Clinical Excellence Research Center, wrote that these findings expand knowledge of the high-need, high-cost population.

They noted that the health care culture needs to shift toward value-based care under the Affordable Care Act. This shift requires rapid acceleration, as well as new data collection and analysis and treatment planning that focuses on the social determinants of health and patient functional status, according to Leff and Milstein. There is also a need for new payment and patient assignment models, they wrote.

“This all needs to happen as our health system addresses the critical challenges of lack of universal access to health care, underinvestment in primary care, administrative inefficiency, and disparities in delivery of care,” Leff and Milstein concluded. “Studies like that of Figueroa and colleagues can help point the way to ‘coolable’ hot spots. The onus is now on organizations and systems to shift culture and learn to implement the care and contracting methods used by their ‘coolest’ peers.” – by Alaina Tedesco

Disclosure: Figueroa reports receiving grants from The Commonwealth Fund. Please see the study for other authors’ relevant financial disclosures.