Does Reducing Hospital-based Care Actually Reduce Overall Costs?

By | July 8, 2020
waiting room at night

There is a definite belief that if we invest in care that prevents Emergency Room visits and hospitalizations, there is a positive impact on outcomes and costs. For instance, a recent study in Health Affairs by Wright et al. evaluated this belief in the Iowa Medicaid Healthy Behaviors Program. In their research, they found a substantial decrease in ED visits and hospitalizations, even though overall spending was higher. Their study delineated two critical findings; the first being, a significant portion of this was due to increased pharmaceutical expenditures.  And, the second that the program’s uptake by members was minuscule resulting from poor communication of the plan to Medicaid enrollees.

What is significant is not what the results showed, but instead, what the overall program tells us concerning how we implement transformation, what that modification is, and the need to be careful in how we translate the outcome metrics. At face value, one may argue that if the goal is to save money, perhaps we shouldn’t focus on preventing expensive care since the cost of prevention is higher than the outcome.

Instead, the program’s uptake by members was modest, a result of poor communication regarding the plan to Medicaid enrollees. Foremost, when a program is limited to a few, self-selection bias tends to play an influential role. When focusing on populations, interventions must impact a significant portion of the identified participants. Additionally, how long one follows the studied group is also crucial. Maybe the timeframe of the study is too brief Moreover, this finding is problematic for the programs’ financial stability as early results are desirable to provide continuous funding.

Without a doubt, I believe there is a preeminent dynamic at play. What are the interventions, and what do they transform? If it is just a more aggressive treatment of chronic conditions with expensive medications and labor-intense models, one may observe costs increase, especially if the time-period is insufficient. Hence, the underlying physiologic condition’s root cause remains unaltered or prevented; instead, it is just treated differently.

To be truly impactful, we need to modify the underlying drivers of physiologic conditions, whether this is obesity, or factors that impact diabetes and hypertension, or dangerous lifestyles that might lead to injuries. There are numerous ways to implement this, yet we are not willing to apply those that are easiest, as we are proud of our ability to be individuals and thus tend to limit the restrictions, we “force” on each other. This reality is neither good nor bad, merely a fact of whom we are as a country. However, if we figure out how to influence these underlying “conditions” in a behavioral science model, we may have greater success.

We must utilize all our information to continuously question if an intervention is worthy of continuing and also be open to understanding what could be the reasons for a failed hypothesis. Therefore, we need to be extremely honest with ourselves and decide if our thoughts were incorrect. If so, do we need to adjust our thinking and implement a different intervention and test again? If we genuinely wish to innovate, we must examine our responses with a keen eye towards an iterative process leading to improvement, making sure we define the meaning of success.