The following statistic from the Centers for Disease Control and Prevention (CDC) never fails to shock: the 133-million adults – or “nearly 1 in 2” — with chronic disease account for 75% of spending. Engaging those high utilizers, the story continues, will help bring healthcare spending under control.
This storyline is a classic healthcare urban legend. Essentially nothing in that paragraph makes sense as a matter of policy, or even arithmetic.
Yes, the CDC got their arithmetic wrong. 133-million Americans comprise about 60% of adults, not “nearly 1 in 2.” Second, their definition of “chronic disease” specifically includes stroke, which is a medical event, not a chronic disease, and cancer, many of which would not fit that definition either. (Sloppy editing and arithmetic is a CDC trademark. They also observe that ”almost 1 in 5 youth…has a BMI in or above the 95th percentile” on their growth chart, which of course is mathematically impossible as written.)
Third, speaking of definitions, how are they defining “chronic disease” so broadly that 60% of us have at least one? Are they counting tooth decay? Dandruff? Ring around the collar?
Corrected or Not, The Statistic Itself Makes No Sense
The statistic is intended to demonstrate that a concentration of costs among people with out-of-control chronic disease but actually shows the opposite. It shows a diffusion of costs, not a concentration. 60% of adults accounting for 75% of spending – or even the incorrect 50% of adults accounting for 75% of spending — is about as far from a 20-80 rule as one can get. Basically costs are not concentrated in ongoing day-to-day chronic disease.
Second, that 75% covers all expenses of that 60%, not just being out of control and needing to go to the hospital, which seems to be the underlying assumption behind the flurry of activity designed to engage these people and control their conditions. Quite the contrary: in many conditions (rare diseases, high blood pressure and asthma come to mind) preventive drugs already overwhelm medical events as a expense category. In a typical commercial or even TANF Medicaid population, only about 10% of hospitalizations are for the five “common chronics” of asthma, diabetes (and its complications), CAD, COPD and heart failure. (In Medicare this percentage and absolute number are much higher – that is indeed a population where control of chronic disease matters.)
Third, “all expenses” means “all expenses” on that population, including those that are unrelated to the chronic disease, like being in a train wreck.
Fourth, a few of those people with chronic disease are high spenders due to the nature of their specific disease. Some rare chronic diseases require six-figure annual expenditures on drugs alone.
Fifth, the truly out-of-control high chronic utilizers usually differ year over year. You know who had a heart attack last year but you don’t know who is going to have one next year. So you don’t know who to spend your time engaging.
The bottom line: in a commercial population there is very little cost to be saved by focusing on trying to get more people to take more drugs to control their conditions.
Engagement May Not Work
Let us assume that despite all that, there are some number of patients who are worthwhile to engage. How well is this engagement strategy likely to work?
In my next book, Cracking Health Costs, I title the chapter on ACOs and patient engagement: “Déjà Vu All Over Again, Again, Again.” The ACA era is the fourth time health care pundits have “discovered” engagement. The first was HMOs, in which doctors were supposed to help patients maintain their health (hence the name) but which devolved into a cost-containment tool. The second was disease management, which involved connecting people with chronic disease to live nurses on the phone. That didn’t engage people. Third, wellness was supposed to accomplish the same thing for a much broader pool, engaging people through a combination of bribery (called “incentives”) and coaching. That not only failed to work, but it turns out virtually all wellness vendors who claim cost savings are simply making up results. As was extensively chronicled in Why Nobody Believes the Numbers, anyone with any basic understanding of study design would find these alleged results to be hilariously transparent lies, in the case of at least one major carrier quite purposefully designed to fool benefits consultants. These vendors have invariably found that the cost of engagement exceeds the benefits.
So perhaps the fourth time, engagement will be a charm, because it involves risk-bearing physician practices and medical homes and electronic medical records. Well, that’s been tried too. On a large scale, North Carolina Medicaid has attempted for more than a decade to engage members through a statewide medical home. Following years of cost overruns and massively high per capita spending, the program – maintained until now only because the proponents paid several sets of consultants to lie for them – is being dismantled by the state if the governor’s plan goes through. Even so, physician practices should be more successful in engagement – the patients know and trust them to begin with – but they would have to be very successful in reducing utilization to cover the very high costs of one-on-one face-to-face engagement.
Engagement isn’t even always automatically the right answer. I have blogged previously about how I am a non-engaged patient because the things that my doctor has wanted me to do have been absurdly expensive and not-evidence based…and yes, I am in a risk-bearing PCMH with an electronic medical record. Sometimes the patient is wise not to engage.
Notwithstanding that type of negative experience with engagement (not my first), there is probably some marginal benefit to engagement (and in the Medicare population, probably substantial benefit) but this obsession with engagement takes our eyes off some of the bigger cost drivers of overdiagnosis, overtreatment, and expensive new technologies of marginal value.
Not to mention medical errors, which may be the most pervasive, debilitating and expensive issue of all. Don’t believe me? Next time you are in a group, ask people to raise their hands if they or a loved one was admitted to the hospital due to a failure to engage. Then ask how many of them or their loves ones have been victims of medical errors. Count the hands, and then tell me that the latter isn’t much more important than the former.
Finally, there is a solution to engaging people en masse to change behaviors, and it has essentially nothing to do with the delivery system. It’s called public health and it’s the role of government. Raise taxes on cigarettes, institute taxes (collected at the producer level) on sugar, corn syrup, transfats etc. Basically, raise the price of bad behavior. To then encourage good behavior, earmark that money towards upgrading of recreational facilities, rail trails, subsidizing farmers markets in underserved neighborhoods. Basically, make it easier and cheaper to be healthy.
Instead, the current strategy, which places the onus for engaging patients in behavior change on employers and doctors, could be called the privatization of public health. It’s an inefficient and ineffective substitute for the real thing, and is about as likely to work as the many attempts at cost-reduction-through-engagement which have preceded it.
Al Lewis, author of Why Nobody Believes the Numbers and co-author of Cracking Health Costs, is president of the Disease Management Purchasing Consortium. A previous version of this posting appeared on The Doctor Weighs In.