The Sweet Spot of Health Care Cost Containment – The Health Care Blog

BY BEN WHEATLEY

As health care continues to move in the direction of unaffordability, policy makers are considering a range of options to bring down health care costs. The Health Affairs Committee on Health Care Spending and Value has identified four broad areas for reform, including administrative savings, price regulation and supports for competition, spending growth targets, and value-based payment. These measures appropriately target health care’s supply side and the excesses that exist in the health care system.

In this blog, I would like to highlight another avenue for savings: one that focuses on the demand side of the equation. It is possible to reduce health care expenditures by reducing the demand for care. This is distinct from rationing, which is the denial of needed care. I’m referring to genuine health improvements that make health care less necessary in the first place. This type of health improvement is the sweet spot of health care cost containment, benefiting both patients and purchasers.

In a previous blog, I posed the question: in an ideal world, how much would we spend on health care? I posited that in a perfect world, we would spend zero on health care because no one would be sick. While such a perfect world may be unachievable, having the goal in mind can serve to guide our way in the present moment—like entering a destination into GPS.  

Measures that promote genuine health improvement can alleviate the burden of illness while at the same time reducing the cost of care. They move us in the direction we want to go. In this blog I provide several such examples.

An Ounce of Prevention

The CDC explains that there are several different types of prevention. Primary prevention happens prior to a diagnosis—for example, smoking cessation that is initiated before lung cancer develops, or seat belt use that prevents a car crash from doing any physical damage. This type of prevention occurs on a fundamental level—preventing the illness or injury from happening at all. Primary prevention promotes health improvement while also bringing down costs. However, the savings may be diminished depending on the level of health system involvement (e.g., if rather than quitting on his own, the smoker employs pharmacotherapy and counseling). 

Secondary prevention involves screening to identify diseases that are occurring in early stages, before the onset of signs and symptoms (e.g., mammography and regular blood pressure testing). 

Tertiary prevention involves managing disease after the diagnosis has already been made, to slow or stop disease progression. This includes measures such as chemotherapy, rehabilitation, and screening for complications (e.g., routine eye exams to detect and treat diabetic retinopathy).

Prevention has not always been shown to reduce healthcare expenditures. According to one report, “hundreds of studies have shown that prevention usually adds to medical costs instead of reducing them. Medications for hypertension and elevated cholesterol…and screening and early treatment for cancer all add more to medical costs than they save.” This reflects the fact that health care is expensive, and care can become costly, even when it’s implemented upstream. Such interventions may be beneficial, but they do not occupy the sweet spot of healthcare cost containment. 

Twelve Steps

Alcoholics Anonymous now has over 2 million members in 180 nations and more than 118,000 groups. A Cochrane study pointed out that “alcohol use disorder (AUD) confers a prodigious burden of disease, disability, premature mortality, and high economic costs from lost productivity, accidents, violence, incarceration, and increased healthcare utilization.” In a systematic review of the literature, Cochrane found that “there is high quality evidence that [Alcoholics Anonymous/Twelve‐Step Facilitation is] more effective than other established treatments, such as [Cognitive Behavioral Therapy], for increasing abstinence.” Moreover, “AA/TSF probably produces substantial healthcare cost savings among people with alcohol use disorder.” This well-known health innovation is one that has been promoted and practiced by patients themselves, without the direct involvement of the health care system. 

Prevention That Brings Down Psychiatric Hospitalization

I was diagnosed with bipolar disorder in 1998. From 2001 to 2008, I was hospitalized for mania at a rate of almost once per year (7 times in 8 years)—including one month-long hospitalization. In response, I developed from scratch a mood tracking system that was designed to help me monitor my condition and promote self-regulation. I used the system three times a day for a period of many years, and in doing so, I substantially reduced both my emergency room utilization and my rate of psychiatric hospitalization. This resulted in direct savings of tens of thousands of dollars. The intervention itself was free. 

From 2008 to 2013, I was hospitalized at a rate of only once every three years. Today, I have been hospitalized only once in the past 10 years. I have not been hospitalized at all in the past seven years. These results point to the sweet spot of healthcare cost containment, where health improves and—as a direct consequence—spending goes down. 

The mood-tracking system I developed was designed to flash red whenever I started to become manic. The system asks 10 questions (e.g., “are you feeling optimistic about the future?”) and assesses mood on a 100-point scale (anything above 50 is an up mood, anything below 50 is a down mood). My highest score was an 85, the day my son was born. However, I was not at all manic that day. So, I developed a second metric (on a 0 to 10 scale) that captured my mania level. On that scale, any score between 0 and 5 is a green light (not manic), 5 to 7 is a yellow light (caution), and 7 to 10 provides the red flashing light. 

I found that having this early warning system enabled me to take steps to counteract the mania. For example, I learned that eating helps. Exercise helps. Talking to people helps. My therapist and I worked out an arrangement that, if I scored at or above an 8, and the system was flashing red, I would take an anti-psychotic pill PRN. These steps helped me to remain out of the hospital.

To generate the mania score, I asked 5 additional questions (e.g., hours of sleep, and number of “Big Ideas”). There was a measure for “outside warnings” (e.g., if a family member or friend expressed concern about my mental health). I quickly learned that this factor should be heavily weighted. The remaining two questions were for “caught manic thoughts” and “believed manic thoughts.” I might have thought that people were reading through my e-mails or monitoring my calls, but the thought was “caught” in the sense that I recognized it as manic thinking. A “believed” manic thought meant that the surveillance was really happening (i.e., I did not view my escalating concern as the product of mania).

Through trial and error, I was able to develop weights for each of these queries and I tabulated them in a formula in Excel. Over time, I was able to refine the weights until the scores gave me a highly accurate representation of my manic state. If the system says I am a 6.8 yellow, that is the correct depiction of my state at that moment. 

But it was not just the output that proved helpful, it was also the process of inputting the data. The system forced me to monitor my own thought processes. I became acutely aware of my own manic thinking and then was able to take steps to counteract it. It was this process of self-regulation that allowed me to reduce the number of manic episodes I experienced—which reduced the number of emergency room visits and psychiatric hospitalizations I had to endure (at great expense to myself and the health care system).  

Draining the Swamp

In 2022, the United States spent an astonishing $4.42 trillion on health care. Certainly, healthcare practitioners work hard to promote positive health experiences and outcomes, and their efforts should not be discounted. But I do not believe that referring to the health care system as a “swamp” is unfounded. Elliott Fisher and George Isham recently pointed out that greed plagues the system, saying: “the public impression that health care is largely about making money undermines the legitimacy and trust upon which we depend.”

The sweet spot of healthcare cost containment comes from draining the swamp, rather than trying to reform the swamp. Patients who do not require health care services do not incur health care expenditures. This type of demand reduction sidesteps other important issues, such as what psychiatric hospitals are charging for an inpatient stay, and what their quality metrics reveal. In an era of healthcare unaffordability, demand reduction is a direction we need to pursue.

Ben Wheatley has 25 years of experience working in health policy with organizations including AcademyHealth, the Institute of Medicine, and Kaiser Permanente (linkedin.com/in/ben-wheatley-05).