Does Anyone Understand that High Cost High Need Patients Drive Consumption?

High cost, high need patients drive consumption of health care services and costs. This fact has been known for decades. In a masterful job of marketing, this fact has been lost completely. What we now see promoted constantly is that physicians and other providers are the reason for overspending. All we have to do is reign in physician behavior and we will save costs. 

But it is still high cost, high need patients that drive consumption!

The Managed Care/Dartmouth designers that have shaped ACA have developed a series of flawed assumptions as pointed out by Kip Sullivan in The Health Care Blog. The Dartmough assumptions were based on Medicare patients - a small 20% that has consumption driven by age and chronic disease. 

Variation in Spending
Variation in spending is about many areas other than overspending on some populations. Overspending happens in some, but underspending also occurs - underspending that can result in higher spending later. Some populations that have lower consumption due to access barriers exist where where Medicaid and Medicare pay too little to support sufficient workforce. Release of pent up demand is another reason for spending. Insufficient local primary care is another reason. Patients forced to go to more highly specialized physicians consume too much.

The Elite Designer solution has been to blame physicians, make physicians change in ways that decrease consumption (needed or not), and play off physicians, their employers, systems, and insurance companies. 

The Team Member Crucible

What has been lost is the focus on the team members to deliver care. The team members are being assaulted by all directions including more patients, more complex patients, insurance hoops, government regulations, EHR requirements, and employer demands.

Some of the assumptions can be seen when experts discuss value based care, pay for performance, or expansions of technology - concepts that move the focus away from the patient, patient factors that predominantly drive outcomes, and the team members that could influence patient factors if not for declining support, declining productivity, and increasing burnout.

You will see the assumptions in the following expert writings, followed by my comments.

From The Commonwealth Fund’s David Blumenthal, M.D., and Melinda Abrams highlighted six key opportunities in this JAMA “Viewpoint.”

Policy Options for Improving HNHC Patient Care

Promote value-based payment. The prevailing fee-for-service payment system—which incentivizes the delivery of more services, even when fewer may be needed—represents a major obstacle to improving HNHC patient care. Value-based payment strategies will give providers a stake in optimizing, rather than maximizing, the delivery of health services.  

Improve value-based payment design and implementation. Authorities need to ensure that clinicians working under value-based payment arrangements do not continue to be reimbursed on a fee-for-service basis, which sends mixed messages. Equally critical will be developing risk-adjustment formulas that account for social and economic factors that complicate care for HNHC patients. Failure to do so may discourage physicians from treating these individuals.

My Comments
  • Note here the managed care/Dartmouth dogma that claims that all designers and designs need to do is to make physician behavior in high use areas of the nation change to resemble physician behavior in low use areas. This is absurd as the consumption or lack of consumption is about patients and patient factors. 
  • Blame the physician has played well for ten years but has not resulted in improvements in cost, quality, or access. What has resulted is a massive increase in administrative and non-delivery costs.
  • Risk adjustment means that those who deliver care may face decreased revenue and consequences - set up by designers far away that mainly want to cut costs regardless of need to cut or not.
  • Physicians and providers have reacted strongly to the changes. Prominent has been the rapid expansion of digitalization and EHR. These are not necessarily the problem. 
  • The real problem is about the designers that have exceeded the limits of these technologies - and have marginalized team members to deliver care in the process. 
  • What this has done is to increase health care costs while decreasing team member productivity - and also changing physician behaviors the wrong ways. Physician Behavior has been changed  -  the wrong way
Allow payments for nonmedical services. Meeting the housing, nutritional, and personal care needs of HNHC individuals is important to improving their care and reduce their health-related expenses.

My Comments
  • Finally there is some acknowledgement of the importance of people factors. But it takes more than talk. Practices are reeling from all of the billions that now must be spent upon EHR, HIT, and other non-delivery areas forced by regulation.The health care designers cannot even find a way to send a few more dollars to primary care, mental health, or basic services, much less housing, nutrition, or other areas.
  • Designers like to talk about social determinants, situations, and environments but this is just talk. They have a Hope Chest and they hope that more dollars will be spent on people factors, but they are not willing to set this up, nor are they willing to lobby for this and risk their political support. 
Assist clinicians in adopting best practices. Practices should be directed and assisted in adopting proven strategies for addressing the needs of HNHC patients, including: grouping patients with similar needs into cohorts, using multidisciplinary care teams, leveraging health information technology, and promoting patient engagement.
Prioritize health information exchange. Removing the political and economic obstacles to health information exchange—that is, the exchange of electronic health records between providers—would pay particular dividends for HNHC patients, whose complex care must typically be coordinated among multiple physicians.
Support ongoing experimentation. The efforts of the Center for Medicare and Medicaid Innovation and the Patient-Centered Outcomes Research Institute to develop, monitor, and evaluate efforts to care for HNHC patients should be supported and extended. 

My Comments
  • The designers are asking the impossible, perhaps even insane behavior by health care providers. Practices have been stripped of support for team members and face lower morale and productivity. And they the designers state that they should hire more people just to handle the few high cost high need patients - and ignore the remaining flood of patient care demand and complexity. 
  • More time and effort and cost spent on few seems attractive, but this remains a wash. The Congressional Budget Office indicated that special management could save costs, but these efforts had cost equal to what was saved. 
  • All of the above including Health Information Technology were utilized by the Robert Wood Johnson Foundation Aligning Forces for Quality project with 300 million in additional spending over ten years for no effect on population health or quality measures.
  • Trying the same things over and over and expecting a different result is insanity. 
  • Rapid implementation of change is also insanity


Physicians, health care organizations, public officials, and other health care stakeholders cannot achieve their quality or cost goals unless they manage high-need, high-cost patients better.

My Comments

What we now known from insurance plans, ACOs, practices, and hospitals is that they cannot achieve their quality or cost goals if they have concentrations of most complex patients. The managed care plans that were successful taught us this in the 1990s using various schemes to keep from having to sign up the high need high cost patients.

The designers have no clue with regard to the entire spectrum of health care consumption with most urban, highest income, most complex, chronic care, and better paying plans resulting in the most spending while rural, lower income, less educated, less health literate, lower property value, lower resource populations have insufficient workforce, access barriers, and people factors that prevent technology and other interventions from working.

The 2621 counties with lowest concentrations of physicians
  • Have 40% of the US population and only 21% of physicians along with the massive spending disparity that this generates in terms of cash flow, jobs, and economic impact
  • Have small practices and small hospitals that do basic services and are paid less by federal design, and are penalized
  • Have 75% of the rural population and 32% of the urban population, including counties with concentrations of Native, Hispanic, and African American populations
  • Have greater than 40% of Medicaid population and over 45% of children in poverty
  • Have greater than 40% of the Medicare population and disabled population
  • Have greater than 40% of obese and diabetic people and smokers
  • Have greater than 40% of the preventable illness
  • Have the least local resources
  • Have more complex situations, environments, and behaviors
  • Have the least income, education, and health literacy
  • Have the least technology access, Medicaid populations, This is an indication of concentrations of lowest paying federal patients and lowest payments for the same service as compared to highest physician concentration counties. These are also the most complex high need patients (disabled and fixed income populations, poppulations with chronic diseases such as diabetes, obesity
What is most obvious, except to the designers, is that the designs
  • Are doing nothing to help these populations 
  • Are doing nothing to help the practices and hospitals that serve these populations
  • Are costing the providers more and forcing the providers to send billions of much needed dollars outside of these counties to pay for practice consultants, health information technology, and other costs generated by the regulations crafted by the designers
The new designs are most damaging, especially in low resource areas where federal payments are less to least.

Medicaid As Savior or Betrayer of Access

The MACRA Test - Can You Survive the P4P Discrimination?

Time Talent and Treasure to Measure Is Not Quality

The Mess that is MACRA - Kip Sullivan at The Health Care Blog

Scientists Fail at Science involving Physicians and Politics

Selling and Swelling a Bigger HITECH Bubble

Most Visited Early Blogs

Three Dimensions of Non-Primary Care vs Zero Growth in Primary CareFinance-me-cratic Constants in the Bureaucratic UniverseMeeting Primary Care Needs in the Last Half of the 21st CenturyExploring the Health Consequences of Disease Focus

Basic Health Access: Does Primary Care Experience Matter?

Primary care can be recovered and should be recovered, 
but cannot be recovered when moving the wrong directions

Robert C. Bowman, M.D.

The blogs represent the opinion of the blogger alone.
Copyright 2016


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