Low-Value Healthcare Remains Even Without Fee-for-Service Incentives

This video, based on an editorial in the Journal of the American Medical Association, challenges the common assumption that eliminating fee-for-service reimbursement models would resolve the problem of low-value healthcare. Dr. Eric Bricker explores how unnecessary, wasteful, and potentially harmful medical services persist even in systems where physicians are salaried or hospitals operate on global budgets. The core argument is that while fee-for-service can incentivize over-provision of care, its absence does not automatically eliminate low-value practices, suggesting a more complex underlying issue within healthcare delivery.

The presentation provides compelling evidence from various healthcare systems to support its thesis. Examples include Canada, where 30% of seniors in Alberta still received at least one of ten low-value services despite having a non-fee-for-service system. Similarly, Maryland's hospitals, operating under global budgets, showed high rates of overutilization for 19 different services. Even the Veterans Administration (VA), where doctors are salaried and shielded from malpractice, reported 5% to 21% of veterans receiving low-value testing. These examples highlight that the problem of low-value care is systemic and transcends specific reimbursement structures, leading to iatrogenesis—illness or conditions caused by medical intervention itself.

A significant insight from the research cited is that the nature and prevalence of low-value services are highly localized, forming unique "micro-environments of waste." This means that the specific types of unnecessary care vary significantly by state, physician group, and even individual hospitals. For instance, one group might exhibit low-value imaging, while another might have issues with certain types of surgeries. This localized variation suggests that broad, top-down policy changes are often ineffective or even counterproductive. The video concludes by outlining four "antidotes" or solutions that advocate for a bottom-up, data-driven, and patient-centric approach to tackling this pervasive issue.

Key Takeaways:

• Low-Value Care Persists Beyond Fee-for-Service: The video debunks the notion that simply eliminating fee-for-service incentives will solve the problem of unnecessary and wasteful healthcare. Examples from Canada, Maryland (global budgets), and the VA (salaried physicians) demonstrate that low-value care remains prevalent in diverse non-fee-for-service environments.
• Significant Waste and Harm: Approximately 30% of all U.S. healthcare is projected to be unnecessary and wasteful, leading to iatrogenesis—conditions or illnesses caused by medical interventions themselves. This highlights a critical challenge for patient safety and resource allocation.
• Localized Nature of Waste: Low-value services are not uniformly distributed but are highly localized, varying significantly by state, physician group, and hospital. This concept of "micro-environments of waste" implies that the specific types of overutilization differ greatly across various care settings.
• Ineffectiveness of Top-Down Reforms: Due to the localized nature of low-value care, large-scale, nationwide value-based payment reforms by CMS or carriers are often counterproductive. Solutions need to be tailored and implemented at the local level to address specific problems within particular physician groups or hospitals.
• Importance of Measurement and Data: A crucial antidote is to "measure to improve." This involves using cost accounting, specifically activity-based cost accounting, to track resource utilization by individual physicians. The UPMC example illustrates how providing physicians with understandable metrics on their resource use can effectively change behavior.
• Focus on Harm Reduction Over Cost Savings: To overcome resistance and accusations of "rationing care," the focus should shift from saving money to reducing patient harm. Highlighting the direct negative consequences of unnecessary tests and procedures (e.g., stroke from an unneeded cardiac catheterization) can be a more compelling argument for change.
• Decision Support in EMRs: Incorporating decision support tools into Electronic Medical Records (EMRs) is proposed as a way to guide clinicians towards higher-value care. However, the speaker acknowledges the challenge of physician skepticism and lack of credibility often associated with EMR systems.
• Evidence-Based Practice: The underlying message emphasizes the importance of adhering to evidence-based guidelines to avoid unnecessary tests and downstream interventions, thereby preventing potential patient harm.

Key Concepts:

• Low-Value Care: Medical services that offer little to no clinical benefit, are unnecessary, wasteful, or potentially harmful to patients.
• Fee-for-Service: A payment model where healthcare providers are paid for each service they provide.
• Iatrogenesis: An adverse outcome or complication caused by medical examination or treatment.
• Global Budgets/Capitation: Alternative payment models where hospitals or providers receive a fixed amount of money to cover all care for a patient population, moving away from per-service payments.
• Activity-Based Cost Accounting: A costing method that identifies the activities in an organization and assigns the cost of each activity to all products and services according according to the actual consumption by each.
• Decision Support Tools: Software or systems designed to assist healthcare professionals in making clinical decisions by providing relevant information and recommendations.

Examples/Case Studies:

• Canada (Alberta): 30% of seniors over 75 received at least one of 10 low-value services despite a non-fee-for-service system.
• Maryland: Hospitals operating under global budgets still showed high rates of overutilization for 19 different services.
• Veterans Administration (VA): Doctors on salary, with a global budget and malpractice protection, still saw 5% to 21% of veterans receiving low-value testing.
• UPMC: Successfully used activity-based cost accounting to benchmark physicians and provide feedback on resource utilization, leading to behavior change.
• Cardiac Catheterization Example: A specific case of a woman suffering a stroke due to an unnecessary stress test and subsequent cardiac catheterization before a minor thyroid surgery, illustrating the direct harm of low-value care.