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If Sherlock Holmes Investigated Health Care Spending

08/02/16

By:

Tom Robertson, Executive Director, Vizient Research Institute

In The Hound of the Baskervilles, Sir Arthur Conan Doyle’s intrepid sleuth observes that “the world is full of obvious things which nobody by chance ever observes.” Many of us who have spent our professional lives in health care have an intuitive belief that genuine multispecialty medical groups deliver care more efficiently than when physician services are fragmented among multiple, largely independent medical groups.

Cobbling together medical practices, calling the resulting network an “integrated” delivery system, and allowing them to continue to practice independently does relatively little to reduce avoidable variation or eliminate unnecessary spending.

The intuitive sense that the group practice of medicine is inherently more efficient stems from the belief that communication occurs more naturally and more frequently. It assumes hand-offs for patient care are better coordinated. It also implies there is a culture within the group that either encourages greater consistency or may even be rooted in common philosophies that attracted individual physicians to the group in the first place.

A recent study by the Vizient Research Institute suggests that Sherlock Holmes and those of us who always believed that true group practices were more efficient may have been right all along.

Using calendar year 2014 Medicare Quality and Resource Use Reports, we found that patients suffering from diabetes, coronary artery disease, chronic obstructive pulmonary disease, congestive heart failure, or combinations of those chronic conditions incurred significantly higher costs when treated by multiple physician practices compared to clinically similar patient populations treated predominantly by single multispecialty group practices. The cost of episodes for patients who received less than 50 percent of their physician care from any one practice were 40 to 60 percent higher than similar patients who received more than 90 percent of their physician care from a single medical group.

Across the chronic conditions examined, inpatient admission rates were 40 percent higher among patients receiving fragmented physician care compared with similar patients treated predominantly by a single medical group. Post-acute care facility use was two to four times higher for chronically ill patients whose physician care was fragmented.  

Enthusiasm for the popular concept of “population health,” and particularly the presumption that wellness programs and illness prevention are the cornerstones of affordability, is burdened by a considerable amount of wishful thinking. An overwhelming majority of health care spending is incurred by a very small minority of the population – patients involved in chronic and complex episodes of care.

A comparison of patients who receive care from single multispecialty groups to clinically similar patients whose physician care is fragmented indicates that one-fourth to one-third of that episodic spending is avoidable. All of which calls to mind another quote by Sherlock Holmes: “It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts.”  

There is no shortage of theory behind health care provider consolidation. The aggregation of independent providers into legal entities that we call systems does not in and of itself increase adherence to evidence-based standards of practice. The assumption of risk around global spending targets by loosely aligned provider networks calling themselves accountable care organizations does not reliably lead to the reduction of avoidable variation and lower spending.

Theories are meant to be tested rather than assumed. The facts are in. Episode spending for chronically ill patients is significantly lower when care is provided by genuine multispecialty group practices.

These findings have implications for any health system undertaking risk, but even more importantly, they have implications for the economic sustainability of the U.S. health delivery system.

About the author and the Vizient Research Institute. As executive director of the Vizient Research Institute, Tom Robertson and his team have conducted strategic research on clinical enterprise challenges for 20 years. The groundbreaking work at the Vizient Research Institute drives exceptional member value using a systematic, integrated approach. The investigations quickly uncover practical, tested results that lead to measurable improvement in clinical and economic performance.

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