Low-Value Services and Unnecessary Health Care Spending

Low-value health care is defined as a medical service that has little or no clinical benefit, or risk of harm that outweighs the potential benefit.1 Each year, billions of dollars are wastefully spent on low-value services such as tests and medications. Reducing utilization of such services would improve patient safety and quality while also preserving health care resources that could be used more effectively.2 To assist this effort, the American Board of Internal Medicine developed its Choosing Wisely guidelines to encourage physicians, patients, and other health care stakeholders to think and talk about medical tests and procedures that may be unnecessary. Virginia Health Information has developed the MedInsight Health Waste Calculator, which was built using the Choosing Wisely guidelines. This tool is available to All-Payer Claims Database (APCD) subscribers to help users examine the degree of utilization of low-value services. Using this information, the VHHA Analytics Team identified the top low-value services for 2016. The top Choosing Wisely recommendation included by many specialty societies is to avoid routinely performing preoperative testing for patients undergoing low-risk surgery.3 As illustrated in the first chart below, preoperative testing is the source of the most significant spending on claims classified as low-value. While the cost of individual tests may be low, the aggregate costs can be substantial.4 The second chart below reflects a 2016 cost analysis of all Choosing Wisely services in Virginia. The combined costs of diagnostic and preoperative testing was nearly $500 million of total wasted dollars – the average cost per service for such procedures was $523 and $460, respectively. – Analytics Team
1 http://www.medpac.gov/docs/default-source/default-document-library/measuring-low-value-care_apr-2017_public.pdf?sfvrsn=0
2 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3994996/
3 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4527930/
4 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3488956/