WASHINGTON (USA TODAY) - In 2014, expect a flurry of changes to continue to bend the health cost curve down, accelerated by the Affordable Care Act, experts say.
Even die-hard believers in the connection between the economy and how people spend on medical expenses are saying this may be the year that proves them wrong, as providers and insurers rush to make changes to keep profit margins high in light of changes in how they're billed. They'll be led by improved technology that helps them see how to improve quality; preventive programs that have proven they can save millions in long-term costs; and an acknowledgement that consumers hold the purse strings.
"There is a considerable level of consensus based on several recent studies about how to keep costs down," said David Blumenthal, president of The Commonwealth Fund, whose report looking at recent research was released Wednesday in the New England Journal of Medicine. "I think there's a lot of work to be done."
His research highlighted several areas that have seen progress -- both before the health law was enacted and because of the law -- but that still have further to go:
• Moving from a fee-for-service payment system toward risk-sharing or team-health pay systems, such as in accountable care organizations.
• Improving information technology, better coordinating care for the most expensive patients and improving primary care services.
• Teaching consumers to choose care based on better quality and lower costs.
• Reducing administrative costs, such as by standardizing billing and claims forms.
Already, he said, costs have slowed, though it has been hard to determine how much of that has been because of the recession and how much was due to changes in how care is provided. But there does seem to be almost universal agreement that, with those four changes, costs will continue to slow -- as they have in organizations that have already made those changes.
"I think it's fair to say that if this is a trend and if this is an enduring trend, it began a little before the recession, continued through the recession, and seems to have accelerated after the recession," he said, adding that the acceleration occurred at the same time some of the provisions of the health law were going into place. "So it's not a matter of whether the law began it, but whether it accelerates it and it continues."
Some of those changes, he said, are "psychological," because they send a message to providers that they must make changes or they will lose money in the future. The law supports accountable care organizations and rewards them for not duplicating tests or performing unnecessary procedures, and for preventing medication errors.
It includes penalties for hospitals for readmitting Medicare patients for preventable issues, such as infections or problems gained because no one followed up on their care after they were released. It provides grants for providers who participate in Medicare to build up their electronic medical record system.
It requires standardization of many forms. And it demands that insurers lay out their costs and benefits in an apples-to-apples way so that consumers understand what they're paying for, and, more importantly, what out-of-pocket costs they're expected to cover themselves.
"I have always believed that our overall wealth is the predictor of what we spend," Blumenthal said. "That pattern is no longer as clear as it was before."
In fact, he thinks the nation's providers need to be moving faster. There are only 500 accountable care organizations, and he said there should be more. Medicare foots about 30% to 40% of the total health care bill, so the federal government alone won't force the change. And most insurance in the private sector "is still classic fee-for-service," he said.
States could be the ones to further the change, he said, because they can provide anti-trust protections to insurers so that they don't base their marketing on negotiating low rates with providers so they can offer employers lower premiums. This has meant much higher prices for the uninsured and underinsured. And states could implement changes in payment plans in Medicaid plans, further pushing change, he said.
Throughout 2014, experts say, research will continue in the form of big data analysis, aided by provisions in the Affordable Care Act (ACA) that boost electronic health records. Within hospitals and provider groups, doctors will be able to see what works and what doesn't; they'll better be able to make sure quality care is delivered because they'll receive electronic alerts when it is not; and they'll be able to gain outside expertise quickly through electronic means.
"I think the Affordable Care Act certainly accelerated and facilitated those conversations," said Rainu Kaushal, chairwoman of the Department of Healthcare Policy and Research at Weill Cornell Medical College. "We're really fortunate in this country to have some really talented leaders of academic medical centers, and that there's a lot of institutional thought going on there, as well as at other hospitals, about how to reduce costs through improved efficiencies."
That doesn't mean the research won't bring some surprises:
Rich Duszak, a researcher for the Harvey L. Neiman Health Policy Institute, released a study in the American Journal of Roentgenology showing that the costs of MRIs were going down, defying the conventional wisdom that MRIs are a good place to cut costs, he said.
But that may be for two reasons: Policies reducing payments designed to cut costs may have, in fact, already worked. Or fewer providers are asking for them, either deeming them unnecessary or cutting down on test duplications.
"Clearly there's been a huge emphasis on bending the cost curve," he said. "But in any policy discussions, we need to be looking at what things look like now compared to what they looked like five years ago, because this is a very dynamic process."
Even he was surprised by his findings.
"If I had to predict, I would have thought radiology went from the top down to the middle" of procedures by expense, he said. "It really was an a-ha moment that medical imaging was so far toward the bottom."
This is important as policy makers search for areas to cut waste, he said, because things can change quickly.
In other areas, experts say there's no doubt about how savings can be achieved.
Ellen Nelson, who heads up ACA implementation at Catamaran, a pharmacy benefit manager serving 25 million people, said she expects costs to go down as more people gain access to insurance that covers medications.
"Right now in the United States, for the folks who do have benefits, there is an issue of adherence: taking medications in a routine way, and thereby treating and preventing an issue," she said. "With the ACA, I think there's really an emphasis on improving education."
As an example, she said a 28-year-old man with early onset diabetes may never have had insurance before.
"If we can intervene and start a health plan with that person at 28, we can avoid hospitalization and other chronic care costs as they get older," she said.
Multiply that by hundreds of thousands of people, she said, and costs will come down, not only in healthcare, but in days lost at work and quality of life.
Add to that more vaccinations and "we'll have reduced outbreak of diseases," she said. "With pharmacy benefits, even though the overall trend rate goes up for a period of time, it stabilizes by about 2020. You spend less per person, and there's a better return on your investment."
But 2014 will also bring more evidence-based, cost-effective preventive care - often in unexpected places, said Matt Longjohn, senior director of chronic disease prevention at the YMCA. Several years ago, he said the Y's leadership started looking at chronic disease and community health, and it coincided with the ACA and employers' and insurers' understanding that it's cheaper to prevent diabetes and heart attacks than to pay for them.
The idea isn't as controversy-free as one might assume: critics have said preventive programs may cost more than they save, as may be the case with weight-loss programs that don't show any immediate savings or cancer screenings that may cost more in testing than they do in saving lives. The ACA requires that some preventive programs be covered by insurance plans.
"Not all of those have been proven cost-effective," Longjohn said. "I think that's a fair statement. But for the ones that we're engaged in, I feel really good about being able to talk about their cost-effectiveness."
YMCA is working with 27 health plans to insure people so they can participate at no cost in a diabetes prevention program.
"The results are staggering," he said. "We're preventing new cases of diabetes at a rate of 58% higher than doing nothing for those with pre-diabetes. The results are better than what they find using drugs."
They plan to spread the program to 60,000 people a year by 2017, and they're a year and a half away from finishing a demonstration project with Medicare.
"For about a year, we have been using the diabetes prevention program to serve older Americans in 17 cities," he said. "Our economist partners are estimating we'll save tens of millions of dollars just with this one demonstration project."
The key is that they step in just for adults with pre-diabetes. "We're catching them right at a moment where they're about to accrue new medical costs," he said.