Industry observers might appear to be overly occupied with what the future holds in terms of things like ACOs, mobile health or big data, but there are still opportunities to save money and improve quality within the current fee-for-service state.
The health care supply chain is one area that may not get as much attention as it could. UHC, an alliance of 120 nonprofit academic medical centers and affiliated hospitals, just announced that its members saved $284 million through improved supply chain management.
The savings came through a variety of ways that partly entail being smarter about purchasing practices and getting clinicians to understand that purchasing decisions can be improved.
Generally, the techniques reported by UHC members involved expanded automation and standardization of the supply chain, expanded relationships with clinicians regarding purchasing choices and the systematic analysis of the clinical effectiveness of supplies being used, says Jake Groenewold, UHC’s senior vice president of supply chain.
As an example, Groenewold points to the purchasing of back surgery material called bone morphogenetic protein, a relatively costly supply item. In the example cited by a member, surgeons were tending to order the largest size of BMP — which can carry a cost of more than $10,000 — to ensure it didn’t run out during the procedure.
The member hospital saved more than $500,000 in a year with that one product merely by writing into the protocols a prescreening to determine how much BMP was needed and readying the appropriate amount, Groenewold says.
Another more extreme example of how spending could be reduced concerns the Medicare Part B program. A Health Affairs report demonstrates how a shifting of drug prescribing for certain kinds of blindness could save Medicare $18 billion over a 10-year period.
The Health Affairs study attempted to put a number on the savings that could be achieved by shifting prescribing, when appropriate, from a costly drug to a cheaper, off-label biosimilar for age-related macular degeneration and diabetic macular edema. Ranibizumab, which costs $2,023 per dose and is known as Lucentis, has similar efficacy to bevacizumab, which costs $55 per dose and is known as Avastin, according to the study.
Since ophthalmologists have an incentive to prescribe the more costly drug under Medicare's current payment methodology, the study authors suggested boosting reimbursement to physicians for prescribing Avastin.
"Altering patterns of use with these therapies by encouraging bevacizumab use and hastening approval of biosimilar therapies would dramatically reduce spending without substantially affecting patient outcomes," the authors wrote.
Sounds like a no-brainer to me.