Switching to high-value physicians in Medicare saves $286B
If physicians caring for Medicare fee-for-service patients were all high-value physicians, the federal program could cut healthcare costs by a whopping $286.8 billion from 2020 to 2029, according to UnitedHealth Group. For 2020 alone, Medicare could save more than $20 billion if all physicians were considered high value.
The report comes at a time when healthcare costs are expected to continue rising in the U.S. They are a top financial concern for Americans, and many are seeing their out-of-pocket costs rise.
The healthcare company extrapolated potential Medicare savings based on its own findings of its high-value physicians. UnitedHealth Group is a for-profit managed healthcare company based in Minnesota that offers insurance through its UnitedHealthcare name and pharmacy benefit management services through its Optum brand. It is also the largest healthcare company in the world in terms of revenue.
According to UnitedHealthcare, high-value physicians met both quality criteria and cost-efficiency criteria, with higher rates of compliance with evidence-based medicine and lower rates of complications and revisions than other physicians.
The efficiencies and lower costs among these high-value physicians were significant. For example, patients older than 65 with UnitedHealthcare commercial insurance who saw high-value physicians for more than 75% of their care in 2018 experienced 64% fewer inpatient hospital days, or 717 fewer days per 1,000. When it came to emergency department visits, patients under high-value physician care saw 35% fewer visits, and this group also had 21% lower risk-adjusted spending––about $95 lower per member per month––than other patients.
The savings estimated by UnitedHealth Group would reach taxpayers and Medicare beneficiaries is extrapolated to the Medicare program.
“While the federal government bears a majority of the cost of care for Medicare beneficiaries, seniors pay for the remaining cost of their care through premiums, copays and coinsurance,” the report reads. “If more physicians caring for Medicare FFS patients become high value and Medicare health spending declines as a result, seniors will also realize savings through lower premiums and out-of-pocket costs.”
However, savings vary across specialties––as well as within specialties, due to differences in practice patterns and payment rates from lack of transparency of cost differences by site of service, physician training and education, as well as physician employment and ownership arrangements. Still, across all specialties caring for Medicare patients, high-value physicians saved more than other physicians on a per-patient or per-episode cost––$596, or 6.9%, lower.
Primary care saw the highest savings among high-value physicians across the specialties measured, with costs 6.3% below other physicians for $724 in savings on a per-patient or per-episode basis in 2017.
Extrapolated out, the savings for Medicare within primary care from 2020 to 2029 would reach $202.8 billion, according to UnitedHealth Group’s estimate. The 2020 savings would reach $14.5 billion. For all specialties, savings from the 2020-2029 period would hit $286.8 billion.
Switching to an entirely high-value Medicare system is not without its challenges, a UnitedHealth group spokesperson told Health Exec.
"While Medicare FFS has undergone incremental reforms since the program was created in 1965, it has failed to keep pace with private-sector best practices," the spokesperson said. "Medicare FFS is still largely rooted in a volume over value approach that rewards wasteful spending and often fails to deliver access to high-quality, affordable, healthcare. In order to deliver better value in the Medicare Fee-for-Service program, more needs to be done to promote high-value providers and care delivery; advance care coordination; leverage data analytics and technology; and enhance the experience for seniors."
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."