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Want to Reduce Waste in Health Benefits?

A meta-analysis of 54 peer-reviewed publications, government reports, and the "gray literature" estimates that 25% of total healthcare spending can be classified as waste ( Shrank WH, Rogstad TL, Parekh N. Waste in the US Health Care System: Estimated Costs and Potential for Savings. JAMA. Published online October 07, 2019. doi:10.1001/jama.2019.13978; accessed 10/10/19).

This publication advances our understanding of where this waste is actually occurring, potential savings, and even actions that can be taken to reduce waste.

The following charts use the highest estimates of waste and potential savings (estimated at a conservative 25% of waste) to help us target waste-reducing actions that are both impactful and practical. Note, the literature did not estimate potential savings for administrative complexity.

The interventions with the highest potential savings most applicable to employer actions include:

  • Integration of behavioral and physical health
  • Care coordination in Accountable Care Organizations
  • Transitional care programs
  • Optimizing medication use
  • Insurer-based pricing interventions (through actions such as standardized pricing; negotiations; value-based design and purchasing)

What can you do?

  • Get a copy of the full article here (you may need to pay a fee) to see the complete list of areas of potential savings. MBGH employer purchaser members check with ctravis@memphisbusinessgroup.org for additional details prior to accessing the article.
  • Evaluate the effectiveness of the waste-reduction strategies you already have in place. Where do those strategies fall on the complete list? Are they working? If not, can you identify why? What tweaks need to be made?
  • Identify the high impact interventions listed above that you are not addressing. Consider actions you can take and develop implementation plans.

MBGH can assist our employer purchaser members understand more of the applicable findings of this publication and in these steps. We will also explore best practices and share current approaches to these high priority interventions with each other in our Health Benefits Peer Roundtable and Health & WellBeing Peer Roundtable. Reach out to ctravis@memphisbusinessgroup.org for more information. 

Posted by Cristie Travis at 9:30 AM

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