High-volume, low-cost services reflect most unnecessary medical spending, study suggests

Healthcare services costing $538 or less were administered much more frequently than services exceeding that cost, according to a study published in Health Affairs.

For the study, researchers — led by John Mafi, MD, an assistant professor of medicine at the University of California, Los Angeles, and a natural scientist in health policy at the RAND Corporation — analyzed data for 44 low-value health services in 2014. Study authors used data from the Virginia All Payer Claims Database, which comprised administrative claims related to 5.5 million state residents insured under fee-for-service plans in 2014.

Here are four findings from the study.

1. The healthcare services examined in the study were administered to Virginia residents 5.4 million times. Of those instances, 1.7 million were low-value services, or services providing no net health benefit in certain clinical situations. Among these unnecessary, low-value services, 93 percent were low cost and 7 percent were high cost.

2. In total, $586 million was spent unnecessarily on low-value services in 2014, according to the researchers. This accounted for approximately 2.1 percent of Virginia's healthcare costs.

3. For Virginia in 2014, costs associated with the low-cost, low-value services represented 65 percent of costs, or $381 million. This is compared to high-cost and low-value services, which reflected 35 percent of expenses, or $205 million.

4. In addition, six of the 10 most expensive low-value services were low cost. "For example, low-cost preoperative lab testing for low-risk patients undergoing low-risk surgery accounted for nearly half of unnecessary spending," the authors noted.

"Instead of pursuing a politically charged strategy to reduce the use of high-profile and higher-cost low-value services, an alternative approach that initially targets the reduction of high-volume and less costly items might be a more strategic way to catalyze the movement to tackle the problem of low-value care," the researchers concluded. "These findings also suggest that in the aggregate, minor actions by all clinicians can have a sizable impact on reducing unnecessary healthcare spending."

For the full study, click here

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