Catalyst for Payment Reform

California’s crusade against health care waste

California’s crusade against health care waste

One reason health care costs are so high is the exorbitant waste in our health care system. About one-third of all care provided to patients is considered “waste,” meaning that the care was not necessary or appropriate to make the patient healthy. This variability in the delivery of care to patients contributes to about $750 billion in additional health care spending.

Smart Care California is a public-private partnership of health care purchasers, plans, and providers working to promote safe and affordable care in California. This initiative is led by three of California’s largest purchasers—the California Department of Health Care Services, Covered California, and CalPERS, which collectively purchase or manage care for more than 16 million lives, or 40 percent of the state. It is funded by the California Health Care Foundation and convened by the Integrated Healthcare Association. Smart Care California is tackling areas with clear evidence of overuse in medicine including Cesarean sections (C-sections), opioid use, and low back pain. The goal is to align care improvement efforts across multiple stakeholders for these three areas. One of the ways in which this is achieved is through the development and dissemination of tools for purchasers, plans, providers and patients to help reduce harm and waste.

Why did Smart Care California target these three areas and what are they doing to tackle overuse?

  • C-sections save lives in certain circumstances, but also pose serious risks for both mothers and babies. When a woman has a C-section for her first birth, 9 times out of 10, she will have a C-section for any subsequent deliveries. Increased attention to the potential harms and high costs of C-sections has led to a push to lower their rate. Healthy People, a project of the U.S. Department of Health and Human Services, set a national target to reduce cesarean deliveries among low-risk women with no prior cesarean births to 9 percent by 2020. To meet the Healthy People 2020 target, Smart Care California has developed an annual honor roll, awarded in collaboration with the California Health and Human Services Agency, to publicly recognize hospitals meeting or surpassing the 23.9 percent target. Additionally, Smart Care California has developed a menu of payment and contracting strategies to support payers in aligning provider payment with desired birth outcomes.
  • Opioid overuse has become a public health crisis in the United States. Deaths related to opioid use have quadrupled since the early 2000s, amounting to about $78.5 billion annually. Given the urgency of this epidemic, Smart Care California has been actively working to identify promising health plan and provider practices to lower opioid related morbidity and mortality. Smart Care California has published a summary of payer and provider strategies as well as a health plan and purchaser checklist of best practices to support providers and health plans in adopting comprehensive opioid safety programs that will decrease the number of new starts on chronic opioid use, identify patients on risky regimens and work with them to taper to safer doses, streamline access to evidence-based treatment for substance use disorders and streamline access to naloxone to prevent deaths from opioid use.
  • Low back pain is prevalent across the country—more than 80 percent of Americans will experience it over their lifespan. Oftentimes, patients receive CT scans, MRIs, or X-rays to determine the cause of their back pain but many patients don’t need this level of imaging and may be needlessly exposed to radiation by receiving it. Inappropriate imaging often leads to inappropriate procedures, such as surgery, when a more conservative treatment would have led to better outcomes. The overprescribing of opioids to treat low back pain also contributes to the worsening of the opioid epidemic. Smart Care California is working with providers and health plans across California to implement evidence-based guidelines and identify actions they can take to improve care for low back pain.

CPR stands by Smart Care California’s goals and efforts and will continue to follow their work to reduce waste in California in 2018. Hopefully, their learnings can be shared with and spread to the rest of the country.

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