Analysis Finds Progress in Reducing Spending on Low-Value Services Positive but Sluggish

In 2015, annual spending on 5 frequently cited low-value services across the US privately insured population was $3 billion, according to a report from the Research Consortium for Health Care Value Assessment, which revealed slight reductions in spending on low-value services and slow adoption of high-value services.

Looking between the years of 2014 and 2016, researchers of the report found that spending on 5 high-value services increased by 17%. Meanwhile, spending on the 5 low-value services grew by 2%.

The report analyzed spending from a commercial payer covering 10 million lives. Extrapolating these estimates to the entire commercially insured population and adjusting for changes in prices, the researchers found that during the 3-year period, total private health spending experienced a 6.6% growth per year. During the same period, spending on the low-value services actually decreased slightly by an average of 1.7% each year while high-value care spending increased an average of 5.6% each year, indicating that spending on high-value services has not kept pace with overall spending growth.

“Our findings suggest that even though there has been significant discussion on reducing low-value care services in the system, to-date, the reduction has been relatively modest,” said Corwin Rhyan, MPP, senior analyst at Altarum and lead author of the paper, in a statement. “However, the increase in spending on the selected high-value services is a positive indicator and presents an opportunity for future measurement and analysis.”

The 5 low-value care services included in the analysis were identified through work of the Value-Based Insurance Design (VBID) Health Low-Value Task Force, which is led by The American Journal of Managed Care^®’s co-editors-in-chief A. Mark Fendrick, MD, professor of medicine in the School of Medicine, professor of health management and policy in the School of Public Health, and director of the VBID Center at the University of Michigan; and Michael E. Chernew, PhD, Leonard D. Schaeffer Professor of Health Care Policy and director of healthcare markets and regulation lab at Harvard Medical School. The services included:

(1) Vitamin D screening tests

(2) Prostate-specific antigen screening in men over age 75

(3) Unneeded testing and laboratory work prior to low-risk surgery

(4) Imaging for uncomplicated low-back pain within the first 6 weeks of diagnosis

(5) Use of more expensive brand name medications when generics with identical active ingredients are available

During the period, use of brand-name drugs when a pharmaceutically equivalent generic was available accounted for $1.5 billion of the $3 billion total. Vitamin D testing accounted for the next largest amount ($616 million), followed by pre-operative testing and laboratory work for low-risk surgery ($465 million) and low-back pain imaging ($355 million).

Low-back pain imaging experienced the most significant increase (44%) over the 3-year period while spending on routine vitamin D testing and pre-operation testing and laboratory work actually fell by 6% and 25%, respectively.

The 5 high-value care services included in the analysis, which were determined by a literature review process, a review of high-value service recommendations by VBID Health, the Health Effectiveness Data and Information Set from the National Committee for Quality Assurance, and recommendations from the US Preventive Services Task Force. These services included:

(1) Retinopathy screening for people with diabetes

(2) Influenza vaccinations

(3) HIV therapy drug regimens

(4) Vaginal deliveries

(5) Health behaviors counseling (body mass index counseling, tobacco counseling, and drug abuse counseling)

In 2015, there was an estimated $10.5 billion spent on these 5 high-value services, with HIV antiretroviral therapy (ART) accounting for $4.1 billion. Vaginal deliveries accounted for $2.8 billion, retinopathy for diabetes accounted for $2.5 billion, and annual influenza shots accounted for $853 million.

Between 2014 and 2016, healthy behavioral counseling and HIV ART experienced the most rapid growth (61% and 36%, respectively). Annual flu shots increased by 19%, retinopathy for diabetes increased by 9%, and vaginal deliveries increased slightly by 1%.