Reining in the Runaway Cost of Patients with Chronic Conditions

Half of adult Americans have at least one chronic condition, and two-thirds of Medicare beneficiaries have two or more. People with chronic and behavioral health conditions contribute to higher healthcare costs and account for more than 90 percent of the nation’s $3.3 trillion in healthcare spending.

Improving the health of and reducing costs for patients with chronic conditions is both a significant challenge and opportunity. When patients with chronic conditions lack effective, ongoing care, they often seek treatment in an emergency department (ED). As a result, expenses spike for both the hospital and the patient. Yet, emergency visits can often be avoided if people are cared for in a more proactive and effective way – outside of the hospital.

According to a recent analysis by Premier, ED visits from more than a third of patients with one of the six most prevalent chronic conditions were potentially preventable across nearly 750 hospitals, equating to an estimated $8.3 billion in annual costs.

In its work with more than 120 accountable care organizations (ACOs), Premier has also observed that approximately 30 percent of ED visits could be addressed in other outpatient settings. In fact, when healthcare providers work together across the continuum, they can rein in the runaway cost of chronic conditions.

An ounce of prevention worth millions of dollars in cures

In today’s healthcare environment, hospitals and health systems are under dual and often competing pressures to improve care delivery and control costs. Perverse incentives have long impeded this work but alternative care delivery and payment models offer an incentive to organize high-value networks with effective care management programs across the continuum.

To be successful in today’s value-based payment environment, managing the cost of care and health status for patients with chronic conditions is a critical area of focus.

Six prevalent conditions that contribute to the majority of U.S. healthcare spending are asthma, chronic obstructive pulmonary disease (COPD), diabetes, heart failure, hypertension and behavioral health conditions (such as mental health and substance abuse issues). For ACOs and clinically integrated networks (CINs), preventing ED visits and improving health outcomes for patients with these conditions can help health systems avoid millions of dollars in unnecessary healthcare costs.

For example, Premier’s analysis estimates that more than 600,000 ED visits related to diabetes alone were potentially preventable. When you consider that Americans with diabetes cost 2.3 times more to treat than those without, it’s clear to see that reducing preventable ED visits for patients with diabetes could result in substantial cost savings—and that’s only for one of the most common chronic conditions. People with chronic conditions often have more than one.

Healthcare providers need to work together to develop and implement clear strategies that ensure patients have reliable access to the appropriate level of care. To do this effectively, hospitals, health systems, ACOs and CINs need to create to a standardized, cross-continuum care management model that is aligned with primary and other ambulatory care providers.

In short: Prioritize making sure patients with chronic conditions receive the right care, at the right time and in the right place.

Embrace the common goal of keeping patients out of emergency departments

At Premier, we’ve identified five keys to a successful patient-centric, physician-aligned cross-continuum care management model:

1. Establish a care management vision, strategy and infrastructure.
2. Define, stratify and target at-risk populations.
3. Create care plans based on patient needs and goals.
4. Develop multidisciplinary roles and responsibilities to coordinate and implement care plans and associated transitions.
5. Invest in cross-continuum technology and analytics.

At the end of the day, the care delivery system should be clinically integrated and centered on the patient. Premier data reveals that ED visits for patients with chronic conditions vary greatly, representing a major opportunity for healthcare providers to come together and focus on the total medical, behavioral and social needs of these patient populations.

Employing a comprehensive patient-centric, physician-aligned care management model is a key element of clinical integration that can reduce unnecessary ED visits and associated expenditures, while generating ROI for high-value networks.

To learn more, check out Ready, Risk, Reward: Improving Care for Patients with Chronic Conditions and contact us.