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Report says state can save money and improve health care

In Health

7:58 am on Tue, 04.24.12

Annual medical spending in Missouri is expected to rise faster than the national average in the next decade, but the state has several options for lowering costs and raising quality during that period, according to a report commissioned by the Missouri Foundation for Health.

Ryan Barker
Ryan Barker

The report, "Bending the Health Care Cost Curve in Missouri," was given to state lawmakers and others last week as preparation for discussions on reining in cost without hurting the quality of care, says Ryan Barker, director of health policy at the foundation. Discussion is needed, the report says, because the Affordable Care Act will increase the number of residents with health insurance, starting in 2014. Increased coverage means increased use of health services.

Cost projections in the report are based partly on national health spending estimates from the Centers for Medicare and Medicaid Services. That agency expects a 5.9 percent rise in health spending nationally in a decade. The foundation’s report projects spending in Missouri to rise faster during that period, by about 6.2 percent a year. Annual health spending in Missouri would double to $90.3 billion by 2021, up from $46.9 billion in 2011, the report says.

In spite of a relatively high level of spending, Missouri doesn't do as well as it should on health performance and quality measures, the study says, pointing to a Commonwealth Fund scorecard that ranked the state 41st in healthy lives, 30th in access to care, prevention and treatment and 28th in potentially avoidable use of hospital care. That report, and a more recent study by the United Health Foundation, showed that Missouri's health system continued to lose ground on quality and performance. 

In some instances, federal help would be needed to alter health policies for the state to reap the full savings, the MFH study said. Some insurers and hospitals already are embracing some proposals in the study because they are trying to slow their health-care spending.

Baker says the study is interesting because it doesn’t just focus on cutting costs but looks at “improving the health-care system for consumers through higher quality and more coordinated care.” He says the document is important because Missouri, like the rest of the country, needs “to start having serious conversations about how we will really start impacting the cost of health care.”

The foundation’s report cites six ways to bend Missouri’s health-care cost curve:

• Mandate managed care for patients eligible for both Medicare and Medicaid

This option, Barker says, would involve better coordination of services for Medicare- and Medicaid-eligible patients, many of whom might have two or more chronic conditions and get uncoordinated care from their doctors.

“The population we’re talking about is one of the most expensive to care for. If we can manage those chronic conditions better and better coordinate care, not only would we provide higher-quality, coordinated care, but we’d save money,” Barker says.

The study says better coordinated care would save $2.7 billion or more over a decade.

• Focus more on disease management

This recommendation also focuses on better coordination through a team approach and evidence-based guidelines for treating complex and chronic  conditions. Managing disease means preventing providers from duplicating services, such as blood work by a primary-care doctor, more blood work by a specialist, and still more blood work if the patient is admitted to a hospital.

Barker says, “We see so much duplication of services and tests that wouldn’t be needed if physicians talked to one another.” The good news, he adds, is that Missouri is making progress in adopting electronic medical records, which will ease coordination of care for people with expensive, chronic health conditions. Depending on how a disease management program is designed, the savings can be as small as $23 million and as large as $3.2 billion across the state, the report says.

• Promote shared decision-making and palliative care

Patients should take an active role in their care. Barker cites the example of a patient diagnosed with cancer. He says some patients prefer that their doctors tell them what to do about treatment. But others want to be involved by discussing with their doctors treatment options and potential outcomes.

“Research shows that health-care consumers are choosing less invasive (treatment) options,” Barker says. “It’s right for them, and it saves money.”

The study estimates that this recommendation would save at least $4.3 billion over a decade.

• Adopt bundled payment methods

Right now, when someone is treated for heart disease, for example, a separate payment goes to each provider, including the heart specialist, the surgeon, and the hospital. A bundled payment would mean the team gets a lump sum payment, with team members deciding who gets paid how much.

Barker says one advantage of this approach is that it encourages team members to work together for good treatment because they wouldn’t receive an additional fee for an avoidable complication that requires more care.

Depending on the extent to which a bundled payment system were put in place, Missouri could reduce its medical costs by $53 million to $1.9 billion over a decade, the report says.

• Broaden the scope of practice for more practitioners

Missouri's restrictive policies limit the scope of practice for physicians assistants and nurse practitioners. Barker cited the case of a nurse practitioner who can’t care for more patients in the Bootheel because of a state law requiring her practice to remain within a 50-mile radius of a supervising physician.

“This nurse practitioner has a mobile van. Now there are towns with no primary-care doctors within 52 miles from where the supervising doctor operates, but she can’t take the mobile clinic to serve people in the town because of this law.”

He argues that the 50-mile rule is outdated and overly restrictive because technology allows the nurse practitioner and the doctor to talk about a patient's condition and view medical files through laptops, tablets and smartphones.

Expanding the state’s scope of practice policies would reduce Missouri's costs by $1.6 billion over a decade, according to the report.

“Our scope of practice laws are among the most restrictive in the nation,” Barker says.

• Set up a robust insurance exchange

Barker says an insurance exchange is an option that would probably need federal action to be effective. Missouri has yet to begin work on creating an exchange, which, according to the Affordable Care Act, is supposed to be in place by January 2014. Missouri and some other states have put the issue on hold while they await a Supreme Court ruling on the ACA. The federal government is giving states more flexibility in meeting some deadlines for setting up the exchanges.

The important thing for Missouri, Barker says, is to adopt the active purchaser model when it sets up an exchange. Under that model, Missouri would allow insurers to participate in the exchange based on competitive bids, choosing perhaps the top three or four bidders, rather than simply opening it to any insurer that wants to participate. 

“If we let everybody in, we’re not making companies compete on price, and it doesn’t save us as much,” Barker says.

The MFH report says Missouri could save an estimated $3.3 billion over a decade by adopting the active purchaser model for its exchange.

Barker adds that pursuing these recommendations identified in the report would represent a shift in the way Missouri reduces its health-care spending.

“We’ve seen double-digit increases in health-care costs for over a decade, and often our response is to cut programs,” he says. “The problem in doing that is when you cut one thing, the need shows up in another budget line item. It doesn’t really go away and it will cost you something later.”

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