Do more with less: 3 steps to reducing low-value care 

It is well known that the US spends more on health care per capita than any other nation -- upwards of $4 trillion annually – without seeing commensurate health outcomes. One reason is that hundreds of billions of that spending does not improve the health of Americans, including money lost to administrative complexity, pricing failures, fraud and low-value care. Low-value care – services that are provided and paid for but, at best, do not improve outcomes and at worst are harmful – is an area where US health care spending could be reduced. Importantly, the money saved could be used to create ‘headroom’ to provide additional funds for essential, high-value services, many of which are underused (especially by underserved populations). However, while data on unnecessary services has been available for decades, little progress has been made.

Efforts to reduce low-value care are complicated by the fact that any specific clinical service could be high or low value depending on who receives it, who provides it, and where it is provided. For example, a colorectal cancer screening is high value for individuals between the ages of 45-75, but low value for someone at average risk under 45 or over 75 years of age. Colorectal cancer screening is also higher value when delivered at a lower-cost site of care (e.g., home-based stool testing, or colonoscopy in an outpatient center) rather than in a hospital. But once care delivery patterns are established, they are difficult to change, especially if the service generates substantial revenue or reflects an investment in technology or infrastructure. In another example, diagnostic testing and imaging are of little to no value when performed on low-risk patients before low-risk surgery. Most patients undergoing low-risk surgery do not need complete blood counts, metabolic panels, coagulation studies, cardiac tests, chest x-rays, or pulmonary function tests, and yet these unneeded pre-surgery tests are often conducted.  

A recent study in JAMA Internal Medicine found that low-value care is more common in US health systems in the South and West, in systems that had relatively lower numbers of primary care providers, in systems without a major teaching hospital, and in systems that served a higher proportion of non-white patients. This type of information, along with clinician-level initiatives that identify specific unnecessary services and evidence-based tools that quantify their use, should inspire and enable employers to play a more active role in reducing wasteful spending. Even modest reductions can lead to harm reduction, improved quality, enhanced equity and more efficient health plan expenditures. In addition, given the health disparities that already existed and were magnified by the pandemic, eliminating low-value care enhances health equity. Black and Brown patients are at higher risk of receiving more lower-value and lower-quality care when compared to white patients, which contributes to inequities and disparities in health outcomes. By ensuring that each clinical service provided to an individual is of value to their specific clinical situation (and not a “one size fits all” solution), employers can help reduce health disparities. 

But employers can’t tackle this challenge on their own -- they will need to work in partnership with their health plans. Here are three approaches to consider:  

Implementing payment models to incent removal of low-value care. The health plan could negotiate bundled service arrangements with providers, so that all services for a given course of treatment are included in one fee; full capitation is another possibility. Alternatively, consider models that pay a bonus if low-value care is delivered below specific benchmarks, or charge penalties if low-value care exceeds benchmarks.

Reviewing coverage policies with the goal of reducing the utilization of care with no clinical benefit. Consider modeling plan design after the V-BID X health plan, developed by the University of Michigan’s Center for Value-Based Insurance Design, which reduces or eliminates cost-sharing for high-value services and increases cost-sharing for low-value services. If the reduction in spending on services with no clinical benefit exceeds the added expenditures on high-value care, premiums are lowered. This type of plan design requires a thoughtful communication strategy to ensure members know they must confirm with their provider that a service will be covered for them based on their specific circumstances. This way, members and providers are not surprised when a low-value service is either not covered or is subject to increased cost-sharing.

Design pathways to steer employees to providers offering high-quality care and to health systems that follow evidence-based medicine and have worked to reduce low-value care delivery at the system level, so that each treatment and procedure is appropriate for the individual patient. There are a number of approaches explore, with different levels of potential disruption. Employers could implement a navigation or advocacy vendor to direct employees to high-value providers when they are searching for a certain health care service. They could deploy a Center of Excellence strategy to steer employees needing specific services to facilities known for high quality and effective cost management. Or they could steer employees to a high-performance network designed around cost and quality measures.

In your 2023 strategy discussions, be sure to take time to focus on reducing low-value care. The benefit could be freeing up financial resources to cover more generously the high-value care that members expect and deserve.