Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

Reimbursement News

Driven by Fee-For-Service, Docs Say Up to 30% of Care Unnecessary

Profit motives under fee-for-service payment structures are driving physicians to provide unnecessary medical care, about 71 percent of doctors stated.

Fee-for-service and low-value resource use

Source: Thinkstock

By Jacqueline LaPointe

- At least 15 percent to 30 percent of medical care is unnecessary, contributing to low-value resource use and wasteful healthcare spending, stated the majority of physicians surveyed in a recent PLOS ONE study.

While the survey of over 2,100 physicians revealed that 64.7 percent of physicians agreed that up to 30 percent of medical care is unneeded, another 27 percent believed that between 30 percent and 45 percent of overall care was unnecessary.

“Most doctors do the right thing and always try to, however, today ‘too much medical care’ has become an endemic problem in some areas of medicine,” stated Martin Makary, MD, MPH, the study’s senior author and a Professor of Surgery and Health Policy at Johns Hopkins University School of Medicine.

Markey and his colleagues from Johns Hopkins University School of Medicine, Harvard Medical School, and the Lown Institute found that unnecessary tests played a key role in the $210 billion wasteful healthcare spending problem. Surveyed physicians believed that almost one-quarter of tests are unneeded.

Prescription drug use was the second largest contributor to low-value resource use and wasteful healthcare spending, with providers perceiving 22 percent of prescriptions as unnecessary.

Physicians also said 20.6 percent of overall medical care and 11.1 percent of procedures are not needed.

Fee-for-service payment structures played a major role in overtreatment, the survey showed. About 71 percent of physicians believed that providers are more likely to conduct unnecessary procedures when they can profit from the services.

The median response was that 16.7 percent of physicians perform unneeded services because of profit motive.

Another 28 percent of respondents thought that at least 30 percent to 45 percent of providers were driven by profit motive.

Researchers noted that providers who were attending physicians with at least a decade of experience were more likely than similar specialists to say that doctors provide unnecessary care when they profit from it.

Other than payment structures, about 85 percent of providers also stated that patients are facing significant overtreatment because of malpractice fears.

However, researchers noted that providers may be making a mountain out of a molehill with their malpractice concerns. Only 2 percent to 3 percent of patients who experienced harm because of negligence go forward with litigation and just one-half of that group receive compensation, a cited Milbank Quarterly study revealed.

Paid claims also dropped by nearly one-half in the last decade, a 2014 JAMA analysis showed.

In addition, about 59 percent of surveyed physicians said that patient pressure and requests contributed to overtreatment, the survey found.

The patient perception that more healthcare is better care was a key factor for overtreatment. Providers aim to improve patient satisfaction scores to maximize revenue, improve patient retention, and attract new clients.

Hospitals with higher patient experience ratings also reported greater profitability, according to a 2016 Deloitte study. Facilities with “excellent” Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores had a net margin of 4.7 percent versus just 1.8 percent for hospitals with “low” ratings.

In addition, the challenge of accessing prior medical records contributed to low-value resource use through overtreatment, 38 percent of providers said.

To reduce low-value resource use and wasteful spending, 66 percent of providers agreed that the industry should deemphasize fee-for-service bonus structures.

About one-quarter of survey participants stated that shifting away from fee-for-service payments would reduce utilization between 10 percent and 20 percent. Another 24 percent thought the shift would lower overtreatment between 20 percent and 30 percent.

Most physicians also thought reducing fee-for-service payments would decrease national healthcare spending. Approximately 71 percent believed that shifting away from fee-for-service would reduce spending, with the median decrease being between 10 and 20 percent.

Other top potential solutions were training residents on appropriateness criteria (55.2 percent of respondents), easy access to health records from other providers (52 percent), and more practice guidelines (51.5 percent).

Implementing solutions to decrease overtreatment and low-value resource use has the potential to significantly reduce healthcare spending, researchers explained. The Institute of Medicine estimates that the industry spends $750 million each year on excess utilization.

Researchers stated that cutting the use of unnecessary services by one-half would equate to $105 billion in savings annually, or approximately 4 percent of total national healthcare spending.


Join 30,000 of your peers and get free access to all webcasts and exclusive content

Sign up for our free newsletter:

Our privacy policy

no, thanks

Continue to site...