Unnecessary Use in CO Leads to $134 Million in Healthcare Spending

“This most recent analysis puts crucial information in the hands of the people who need it most,” Kristin Paulson, CIVHC president and chief executive officer, said in the news release. “Understanding the most frequent low-value services that occur in Colorado and how much they cost can help health insurance companies, providers and patients work together to improve care and reduce costs.”

The analysis leveraged claims data from 2017 to 2021 from the Colorado All Payer Claims Database (CO APCD). The researchers analyzed the data using Milliman’s MedInsight healthcare waste calculator, assessing the frequency and cost of 58 potentially low-value healthcare services.

The top five low-value services were opioid prescribing, vitamin D deficiency screening, prostate cancer screening, imaging tests for eye disease, and coronary angiography. Together, these services contributed to nearly two-thirds of Colorado’s overall low-value care spending (63%).

Opioid prescriptions for chronic non-cancer pain cost $47.9 million, the highest unnecessary expense. Screenings for vitamin D deficiency cost $12.4 million, and the remaining three services each contributed less than $7 million in unnecessary health care costs.

The average cost of a low-value service was $70 per instance. Some services were very expensive, such as a proton beam therapy service, which can cost $19,000.

The unnecessary spending found in this analysis did not include excessive downstream spending resulting from irrelevant and even harmful processes. For example, unnecessary opioid prescriptions cost the system $47.9 million, but that doesn’t include subsequent costs for treating opioid addiction or overdose deaths.

Five types of Colorado insurers contributed to the database: Medicaid, Child Health Plan Plus (CHP+), commercial plans, paid Medicare, and Medicare Advantage.

Overall, the share of health expenditure that qualifies as one of the 58 low-value services has decreased over time. In 2017, the share fell to between 8 and 9 percent, but by the end of June 2021 it had dropped to around 7 percent.

The payers most likely to spend on low-value services were CHP+ and Medicaid.

CHP+ covered vitamin D deficiency screenings ($177,000), CT scans for abdominal pain in children ($163,000), and pediatric head computed tomography scans ($108,000) to no avail. In Medicaid, the most expensive unnecessary services were inappropriate opioid prescriptions ($12.9 million), vitamin D deficiency screenings ($4.2 million), and prescriptions for two or more antipsychotic drugs ($1 .4 million).

In commercial plans, the highest unnecessary spending occurred for inappropriate opioid prescriptions, routine general health checkups, and vitamin D deficiency screening. Medicare Service Fee Spent on Colorectal Screening in Adults Age-Equal age 50 or older, prostate cancer screening, and a prescription for two or more antipsychotic drugs.

Medicare Advantage spent a staggering $13.6 million on inappropriate opioid prescriptions, plus $2.5 million on spine surgery and $1.7 million on colorectal screening in adults age over 50 years old.

“Interestingly, Medicare Fee-for-Service and Medicare Advantage, payers that typically cover the same age groups, do not have the same top three low-value services in terms of expense, with the exception of colorectal screenings in adults over age 50 years,” the press release noted. “This may be due to differences in coverage and/or reimbursement rates.”

Separate research found that Medicare Advantage plans spend less on low-value care services than paid Medicare due to its value-based care.

An accompanying document recommended payers to evaluate their payment models and incentivize providers to abandon low-value assistance services.

Experts recommended leveraging existing lists of low-value support services, such as those provided by CIVHC, Choosely Wisely, and the USPSTF, to identify low-value services. Levers that can reduce low-value care include alternative payment models, out-of-pocket cost alignment, and joint ventures between payers, providers, and social agencies.