Managed Care - March 2009 - (Page 36) Providers Enlisted To Curtail Waste Attempts to improve efficiency often involve controlling utilization, but Geisinger Health Plan thinks it has a better approach By Tom Reinke “ fensive medicine, $25 billion for preventable readmissions, and $14 billion for unnecessary ER visits. The most significant item in the operational category is inefficiency in claims processing, with avoidable expenditures ranging from $21 billion to $210 billion. David Harris, a PricewaterhouseCoopers partner, says that the definition of waste in the report is costs that could have been avoided without hurting quality. Gilfillan says that the recognition of consumer behaviors as a form of waste indicates that health plans need to move from fragmented efforts to improve efficiency and quality to more comprehensive approaches. He says there are many opportunities to work with providers to reduce all forms of waste. H istorically health plans have poked at the delivery system from the outside to improve efficiency and value,” says Richard Gilfillan, MD, who is CEO of the Geisinger Health Plan. “We said we’ll try precertification, or radiology benefit management, or disease management from our central offices. And we think we have had a great impact with those things, but the reality is that we haven’t had anywhere near the impact that we could have had to help patients be healthier and increase efficiency.” While managed care tactics like precertification have had an effect on waste in the health care delivery system, the primary causes of excess expenditures have changed, indicating that new approaches are necessary. Historically, waste has been defined largely as problems caused by providers — unnecessary services and administrative or operational inefficiencies — but a report from PricewaterhouseCoopers, the international accounting and consulting company, presents a clear case that these problems now take a back seat to other forms of waste. “The Price of Excess” identifies three categories of inefficiency: behavioral, clinical, and operational. It says that wasteful spending totaled up to $1.2 trillion of the $2.2 trillion spent nationally in 2007. Obesity, smoking Consumer behavior is the largest category, with wasteful spending for unhealthy behavior estimated between $303 billion and $493 billion. Obesity is blamed for $200 billion of this. Other behavioral factors include costs associated with smoking (up to $191 billion) and costs from nonadherence to medication regimens ($100 billion). The second category, clinical waste, includes inappropriate expenditures of $210 billion for de- A new mindset Past attempts to improve efficiency often involved controlling providers and utilization, but Geisinger has moved beyond that. “We view our efforts as attempts to enable our providers to do the things that they want to do,” says Gilfillan. Geisinger has started to provide the resources to its own providers (Geisinger is an integrated system) and to contracted providers that will enable them to improve their performance, including the elimination of waste. The idea of enabling practices is a constructive approach for health plans, says Gilfillan. Geisinger Health Plan covers central and northeastern Pennsylvania and has about 220,000 commercial and Medicare members. Geisinger Health System has nearly 700 physicians at 55 clinical practice sites, three acute-care hospitals, a variety of specialty hospitals, and ambulatory surgery campuses. Besides being a staff-model health plan, Geisinger has a network of contracted providers. As both a staff-model and network-model company, Geisinger has implemented certain changes in its own network and then rolled them out, in lim- 36 MANAGED CARE / MARCH 2009
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