The final word: Making cost-effective choices because it’s the right thing to do

Saturday, March 01, 2014 11:46 AM

Alan Kimura, MD, MPH

Viewed from a high-level perspective, U.S. health care reform continues its amazing, century-long journey. In 2014 the Affordable Care Act is attempting to reduce the ranks of uninsured Americans and experiment with new models of health care delivery. 

However, health care financing remains vexingly fragmented in its incentives. If physicians (who control 80 percent of spending by their ordering, yet receive only 15 percent of spending for their services) were rewarded for value not volume, then billions of dollars could be saved each year within the system.

Stewardship in action
Reflecting on Maslow’s Hierarchy of Needs, it is no wonder that some providers find the practice of stewardship merely aspirational, rather than routine. That begs a question: Could stewardship be incentivized to drive system savings? Or more simply put, why is it so difficult to do the right thing in health care? These are complex questions, but my practice is proof that effort is being made by Colorado physicians and savings are possible.

I work with 10 like-minded physicians in a single-specialty, private group, practicing in five offices throughout the Front Range. As ophthalmic vitreoretinal specialists, we must choose between equivalently efficacious biologic drugs, but with strikingly different costs on a daily basis.

We routinely treat macular degeneration with the drug Avastin. Avastin is an FDA-approved cancer medication that also is commonly repackaged and used off-label by retina specialists for the treatment of macular degeneration. Avastin is widely used because it is a highly effective treatment and it is substantially less expensive (approximately $64 per injection) than the other approved alternative Lucentis (approximately $1,980 per injection).(1) Our practice uses the less-costly drug 70 percent of the time, and the more-costly drug 30 percent of the time, after patients fail treatment with the cheaper drug.  Last year our practice did approximately 16,000 injections and by using the less costly drug we saved the system $21.4 million. Interestingly, some practices nationwide are inverted in their prescribing practices, deploying the more expensive drug more of the time. How can these disparities be justified?

Stewardship, according to Richard Block, is a contrarian reframing of a resource problem from one of scarcity to one of abundance. Economics has come to dominate virtually all sectors of life, including health care, and its fundamental tenet is that resources are finite. This mindset drives success in business, which in turn fuels beneficial innovation. But at the same time, scarcity creates pervasive anxiety. Rare is the discussion amongst current health care providers of a sense of security; it’s quite the opposite, of course.

Every licensed physician retains the autonomy to prescribe as he or she sees fit for the patient. Perhaps they find security against malpractice risks when using the more expensive, FDA-approved, manufactured drug. Others are compelled to use the expensive drugs because they are available off the shelf; in some states, the requirement for “patient-specific prescriptions” of compounded drugs force patients to return for another injection visit. Likely the imperative for economic self-interest, which any rational business would practice, is driving physician-prescribing behavior under current fee-for-service payment. We didn’t reap any benefits from using more Avastin versus Lucentis. In fact we lost money because a small, slightly greater margin is retained when prescribing the more costly drug based on average sales price.

Make it easier
So why does our practice continue its Sisyphean stewardship of pushing the rock up the steep economic hill? Speaking for my partners, we simply feel it is the right thing to do, to transcend maximizing profit for no benefit to our patients.

There is no doubt that our stewardship struggles against misaligned incentives in our highly fragmented health care system. The fact is that transcendent, self-actualization alone is unlikely to transform the $2.6 trillion annual U.S. health care expenditure. Even well meaning stewards must acknowledge the reality that if there is no margin, they cannot perform their mission.

Let’s face it, $21.4 million in savings is a small start. But then again we are just one practice. More can be done if changes are made. Harold Miller and others argue that physicians should be properly incentivized to make cost-effective decisions and be rewarded as the key professionals in the health care system that can operationalize such system-wide transformation.(2) A higher level of perspective and ultimately greater alignment of agendas between fragmented stakeholders should be explored.

Endnotes:
(1) Martin, D. F., M. G. Maguire, S. L. Fine, G. S. Ying, G. J. Jaffe, J. E. Grunwald, C. Toth, M. Redford, F. L. Ferris and C. o. A.-r. M. D. T. T. C. R. Group (2012). “Ranibizumab and bevacizumab for treatment of neovascular age-related macular degeneration: two-year results.” Ophthalmology 119(7): 1388-1398.
(2) Miller, H. (2014). “Paying for the SGR Repeal.” http://www.chqpr.org/downloads/Paying_for_SGR_Repeal.pdf.