$2 Billion Spent on Preventable Healthcare Costs, Says MHD Study

Preventable healthcare spending is on the rise, according to a Minnesota Health Department (MHD) analysis of state emergency department visits, hospital admissions, and hospital readmissions. The study showed that approximately 1.3 million of those visits were preventable, according to an MDH press release. Those 1.3 million visits cost the state about $2 million.

This statewide study, which used 2012 data from the Minnesota All Payer Claims Database (APCD), was the first successful attempt of its kind. It utilized the state’s 3M technology – a part of the 3M company – to determine a baseline for how many hospital admissions and readmissions were preventable for the year 2012.

Patient visits accounted for approximately $1.9 billion, or 4.8 percent, in healthcare costs. These figures do not represent full savings potential. The article states that in order for some events to have been prevented, spending may need to have occurred earlier on. However, officials remain hopeful that improvement can still happen.

“Minnesota has one of the most efficient and cost-effective health care systems in the nation but this study shows we still have room for improvement,” said Minnesota Commissioner of Health, Ed Ehlinger, MD.

The study also shows that 2 out of 3, or 1.2 million, emergency department visits were avoidable. These avoidable visits totaled a cost of approximately $1.3 billion. Furthermore, many of these beneficiaries were seen for potentially preventable conditions on more than one occasion. Possibly preventable emergency department visits included patients with upper respiratory infections, abdominal pain, and musculoskeletal and connective tissue diagnoses. Fourteen percent of these visits were made by Medicaid patients.

The cost of potentially preventable hospital admissions totaled to $373 million, according to the study, with 50,000 preventable visits. The most common ailments in these visits were pneumonia – excluding pneumonia due to bronchiolitis – respiratory syncytial virus, heart failure, and chronic obstructive pulmonary disease.

Hospital readmissions that were potentially preventable totaled at 22,000, costing $237 million. Of these readmissions, the most common conditions were heart failure, blood infection and disseminated infection, and major depressive disorder and other unspecified psychoses.

CHIA reports avoidable healthcare costs are a national issue

Earlier this year, the Center for Health Information and Analysis (CHIA) reported that nationally, $17 billion is spent on preventable hospital readmissions, as reported by RevCycleIntelligence.com. This shows that spending money on healthcare for potentially avoidable conditions is a financial problem for healthcare systems all over the nation.

However, the CHIA report, as well as the MHD report, both state that this data means there is potential for growth with regards to patient care, specifically preventative care, which could in turn reduce costs in the future.

How can providers reduce these preventable healthcare costs?

MHD is using the information collected in this study to make improvements in their healthcare system. In order to accomplish that, MHD acknowledges that it has to work on multiple facets of its healthcare system.

“This work requires approaches that look not just at coordinating medical care but addressing social factors and preventing these events from happening in the first place,” Ross Owen, Director of Hennepin Health, a Minnesota healthcare provider, said in the press release.

To combat this issue, MHD plans to implement many different strategies. The first is making sure patients have access to high-quality outpatient care. The second is improving guidance about preventative care via high patient and family engagement. The third is improving care coordination between all of a patient’s caregivers. The fourth is utilizing emerging providers to participate in care coordination to direct patients to social supports. The fifth is ensuring electronic exchange of clinical data and information. The fifth is creating comprehensive discharge planning.

If these above mentioned practices are implemented, MDH hopes to be able to decrease its spending on healthcare for otherwise preventable conditions, and decrease spending on ED visits, hospitalizations, and hospital readmissions.