Addressing Issues of Rising Health Care Costs in Specialty Care

Rising health care costs, increasing utilization, rising premiums, escalating enrollee contributions, introduction of high deductible plans, health spending accounts, the emerging role of the health care consumer, and consumer driven health care benefits all contribute to an increasingly complex and dysfunctional health care system.

In 2006 PricewaterhouseCoopers released a study titled The Factors Fueling Rising Healthcare Costs. The study commissioned by the America’s Health Insurance Plans (AHIP) revealed that health insurance premiums increased an average of 8.8 percent between 2004 and 2005. Of the 8.8 percent, the factors contributing to the increase in premiums were a 27 percent General inflation rate, a 30 percent healthcare price increase in excess of inflation, and a 43 percent increase in utilization. The same report cited prescription drug spending increased 8.6 percent, while diagnostic imaging spending grew at a rate of 13.6 percent. We are now seeing diagnostic services out pacing prescription drug spending.

CareCore National (CCN), a specialty benefits management company, focuses on three key rapidly growing areas of health care: radiology, cardiology, and oncology. The company has first hand experience in identifying, tracking and managing trends of these high cost drivers. According to CCN, the most important factors contributing to the increase in utilization and spending in these three areas include:

• The high cost of technology,
• New imaging procedures,
• New applications for old procedures,
• Changes in the physician-patient relationship,
• Growing dependence on laboratory and imaging studies,
• The use of multiple overlapping examinations,
• Economic pressures on physicians,
• Patient demand, and
• Advertising

Other factors impacting oncology are rising drug costs, new drugs with increasing indications, and expanding off-label utilization.

CCN works with national and regional health plans across the United States to address inappropriate use and quality care for plan members. The company has developed a series of programs, which combine quality standards and utilization tools to manage these specialty areas. These programs are based on the premise that quality care is cost-effective. According to CCN, quality standards are an essential part of a program to control costs and simultaneously provide appropriate, quality services to plan members. The company offers the following insight.

Radiology

Representing 10 cents of each healthcare dollar, health plans view utilization management of diagnostic imaging services as a high priority. Even as advances in imaging have improved outcomes, it is estimated that upwards of 30 percent of the exams being performed are inappropriate, unnecessary or do not influence patient management.

CareCore Radiology’s (CCR) pre-authorization program has proven to be the most effective and efficient component of the company’s imaging utilization management program. With radiology costs rising annually, health plans benefit from an effective utilization management program supported by quality standards. In pre-authorization, clinical information from the requesting provider is matched with specific well vetted current evidence-based criteria. If the information provided is consistent with these criteria, a procedure is authorized.

Through this process, health plans can dramatically reduce utilization of imaging services. For example, in the spring of 2005, CCR was hired as a consultant to a large health plan in the northeastern United States. By applying CCR’s pre-authorization criteria and quality standards, the plan which had more than 200,000 requests reviewed each month, reduced utilization by nearly 20 percent. It reported a first year savings in excess of $9 million. By employing CCR’s clinical guidelines inappropriate exams were eliminated.

With radiology costs trending 15 to 20 percent upward, health plans can benefit from an effective utilization management program supported by quality standards. These standards can reduce costs.

CCR advocates that effective utilization management must focus not only on appropriate imaging studies but also on the quality of those services. In addition to applying evidence-based criteria to requests for diagnostic imaging, CCR monitors the performance of imaging providers through:

• Site accreditation. Sites providing diagnostic imaging services must meet standards for professional and technical performance. CCR recommends that facilities that fail to meet required policy and provider standards be dropped from the participating provider panel.
• Equipment certification. Equipment used in diagnostic imaging must meet minimum quality standards used to determine if a facility will be credentialed to perform highly specialized imaging exams such as Magnetic Resonance Imaging (MRI), Magnetic Resonance Angiography (MRA), Magnetic Resonance Spectroscopy (MR Spectroscopy), Computerized Tomography Angiography (CTA), Virtual Colonoscopy, and Positron Emission Tomography (PET).
• Association recognition. The company also encourages its clients to require accreditation of imaging sites by either the American College of Radiology, the American Institute of Ultrasound in Medicine, and/or the Intersocietal Commission for the Accreditation of Nuclear Medicine Laboratories.
• Film review. Routine review of randomly selected exams consisting of representative examples of completed studies and reports by board certified academic and community based radiologists is also performed. Images and reports must adhere to established guidelines set forth by the American Colleges of: Radiology, Obstetrics and Gynecology, Cardiology, the American Institute of Ultrasound in Medicine and others. When problems are identified, a corrective action plan and monitoring program assures that deficiencies are corrected.

More on quality

In 2002 Mr. Donald Ryan, CareCore National’s Chief Executive Officer, introduced the CCN Quality Imaging Index (QII), which is used to measure objective quality components of a diagnostic imaging practice. The program scores practices based on objective quality indicators. Network practices that demonstrate adherence with the quality standards receive additional compensation. “To date we have found that roughly 50 percent of imaging centers enrolled in our program score in the top performance level, providing high-quality imaging. These centers tend to offer several modalities with more than half of their physicians possessing subspecialty training. They are staffed by on-site physicians. They invest in technology and keep up-to-date software for expensive modalities. They also seek American College of Radiology accreditations for the imaging services they provide, use only licensed technicians, and have concrete peer review and quality programs within their own practices. These sites strive continually to improve quality. Another 35 percent of imaging centers fall into the second quality tier, while the remaining 15 percent fail to meet minimum quality requirements,” Ryan says.

How does this impact utilization? Inadequate exams lead to other exams. When high-quality diagnostic procedures were performed, health plans reduced requests for repeat imaging. This reduced costs for the health plan and prevented unnecessary radiation exposure of plan members.

Cardiology

Heart disease is the leading cause of death for both women and men in the United States. About 1.1 million Americans suffer heart attacks each year, including an estimated 650,000 who will have a first heart attack and 450,000 who will have a recurrent heart attack. More than half of the people who die suddenly of Cardiovascular Heart Disease (CHD) have no previous symptoms of this disease. CHD is the primary cause of premature, permanent disability among the U.S. workforce, accounting for 19 percent of disability allowance. The estimated cause of CHD in 2005 is $393 billion in combined health care services, medications, and lost productivity.

In 2005, CCN launched CareCore Cardiology (CCC) in response to these concerns. CCC developed a program to assist health plans better interface with physicians and plan members. Since heart-related illnesses require timely responses, CCC’s quality standards focus on optimizing turn around time and appropriateness of care.

Using the quality standards framework of its parent company, CCC developed and applied clinical guidelines and algorithms for the utilization of nuclear and echo stress tests, echocardiography, cardiac CT, coronary CT angiography, cardiac MRI, cardiac PET scans, and pacemaker and ICD implantation. CCC created a pre-certification process that allowed for a prospective collection of a vast amount of clinical data including cardiac risk factors, results of prior cardiology studies, co-morbid illnesses, physician ordering trends, pacemakers and ICD trends. As a result, CCC avoids unnecessary duplication of procedures, and determines the appropriate next procedure through the integration of different algorithms. To date, the program has widely exceeded expectations.

Oncology

Some of the most expensive and potentially dangerous pharmaceuticals on the market are those related to the treatment of cancer. Health plans are seeking solutions to manage oncology treatment and member quality of life issues appropriately.

CareCore Oncology (CCO), which covers 14 million lives, has developed tools and programs to address rising drug costs and utilization. CCO’s programs were developed by and are overseen by board-certified hematologists and oncologists.

The core of CCO’s work consists of adopting quality standards to provide appropriate use of oncology drugs, which include drug reimbursement policies. For example, the company assisted health plans to develop appropriate drug reimbursement programs that are cost-effective and meet national guidelines for quality oncology care. The company’s OncoMetrix program provides a baseline to support effective cost management of oncology drugs. Historically, the majority of health plans have reimbursed these medications using an AWP methodology, which resulted in significant overpayments. More recently, CMS has moved to an ASP+ process, which in turn either continues overpayment for these products or shifts the place of service to higher cost facilities. The OncoMetrix program has a proprietary reimbursement method that takes into account the financial needs of network physicians.

Effective drug utilization management also requires evaluation of medical necessity. CCO initiated a program of evidence-based guidelines to determine appropriate use of high-cost medications. This approach has achieved network acceptance, and resulted in preventing a number of serious complications along with a savings of between 30 and 40 percent for its clients.

With the emergence of new technologies such as gamma knife, IMRT, and intra-operative radiation therapy, radiation oncology is a rapidly growing arena of both cost and complexity. Building on its past experience, CCO is developing appropriate guidelines for radiation therapy treatment. The company says that when used in combination with its radiation claims analytics, the radiation treatment guidelines result in appropriate care as well as cost savings.

Conclusion

Rising health care costs affect every American. A responsible approach to addressing medical costs and quality care is to develop quality standards that result in appropriate use of services that cut down on inappropriate procedure and redundancy of service. Incorporating quality standards into radiology, cardiology and oncology will achieve cost-effectiveness and provide patient access to quality care. To learn about quality standards in radiology, cardiology and oncology, please visit http://www.carecorenational.com.