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The American Journal of Managed Care September 2012
Asthma Expenditures in the United States Comparing 2004 to 2006 and 1996 to 1998
Matthew A. Rank, MD; Juliette T. Liesinger, BA; Jeanette Y. Ziegenfuss, PhD; Megan E. Branda, MS; Kaiser G. Lim, MD; Barbara P. Yawn, MD, MSc; James T. Li, MD, PhD; and Nilay D. Shah, PhD
Impact of Clinical Complexity on the Quality of Diabetes Care
LeChauncy D. Woodard, MD, MPH; Cassie R. Landrum, MPH; Tracy H. Urech, MPH; Degang Wang, PhD; Salim S. Virani, MD; and Laura A. Petersen, MD, MPH
Impact of a Managed Controlled-Opioid Prescription Monitoring Program on Care Coordination
Arsenio M. Gonzalez III, PharmD, RPh; and Andrew Kolbasovsky, PsyD, MBA
State-Level Projections of Cancer-Related Medical Care Costs: 2010 to 2020
Justin G. Trogdon, PhD; Florence K. L. Tangka, PhD; Donatus U. Ekwueme, PhD; Gery P. Guy Jr, PhD; Isaac Nwaise, PhD; and Diane Orenstein, PhD
Outpatient-Shopping Behavior and Survival Rates in Newly Diagnosed Cancer Patients
Shang-Jyh Chiou, DrPH; Shiow-Ing Wang, PhD; Chien-Hsiang Liu, PhD; and Chih-Liang Yaung, PhD
Impact of Medical Homes on Quality, Healthcare Utilization, and Costs
Andrea DeVries, PhD; Chia-Hsuan Winnie Li, MS; Gayathri Sridhar, PhD; Jill Rubin Hummel, JD; Scott Breidbart, MD; and John J. Barron, PharmD
Competitive Bidding in Medicare: Who Benefits From Competition?
Zirui Song, PhD; Mary Beth Landrum, PhD; and Michael E. Chernew, PhD
Medication Adherence and Medicare Expenditure Among Beneficiaries With Heart Failure
Ruth Lopert, MD, FAFPHM; J. Samantha Shoemaker, PhD; Amy Davidoff, PhD; Thomas Shaffer, MHS; Abdulla M. Abdulhalim, BSPharm; Jennifer Lloyd, MA; and Bruce Stuart, PhD
Medicare Part D and Potentially Inappropriate Medication Use in the Elderly
Julie M. Donohue, PhD; Zachary A. Marcum, PharmD, MS; Walid F. Gellad, MD, MPH; Judith R. Lave, PhD; Aiju Men, MS; and Joseph T. Hanlon, PharmD, MS
Frequency of and Harm Associated With Primary Care Safety Incidents
Katrin Gehring, PhD; David L.B. Schwappach, PhD, MPH; Markus Battaglia, MD, MPH; Roman Buff, MD; Felix Huber, MD; Peter Sauter, MBA; and Markus Wieser, MD
Outcomes Associated With Timing of Maintenance Treatment for COPD Exacerbation
Anand A. Dalal, PhD, MBA; Manan B. Shah, PharmD, PhD; Anna O. D'Souza, BPharm, PhD; Amol D. Dhamane, BPharm, MS; and Glenn D. Crater, MD
Antidepressant Medication Adherence via Interactive Voice Response Telephone Calls
Terri Castle, RN, MS; Michael A. Cunningham, MS; and Gary M. Marsh, PhD
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Measuring Value for Low-Acuity Care Across Settings
Sofie Rahman Morgan, MD, MBA; Meaghan A. Smith, BS; Stephen R. Pitts, MD, MPH; Robert Shesser, MD, MPH; Lori Uscher-Pines, PhD, MSc; Michael J. Ward, MD, MBA; and Jesse M. Pines, MD, MBA, MSCE

Measuring Value for Low-Acuity Care Across Settings

Sofie Rahman Morgan, MD, MBA; Meaghan A. Smith, BS; Stephen R. Pitts, MD, MPH; Robert Shesser, MD, MPH; Lori Uscher-Pines, PhD, MSc; Michael J. Ward, MD, MBA; and Jesse M. Pines, MD, MBA, MSCE
To analyze value of low-acuity care, an existing model is adapted to highlight factors impacting how stakeholders assess emergency department care compared with alternatives.
Increasing healthcare costs have created an emphasis on improving value, defined as how invested time, money, and resources improve health. The role of emergency departments (EDs) within value-driven health systems is still undetermined. Often questioned is the value of an ED visit for conditions that could be reasonably treated elsewhere such as office-based, urgent, and retail clinics. This paper presents a conceptual approach to assess the value of these low-acuity visits. It adapts an existing analytic model to highlight specific factors that impact key stakeholders’ (patients, insurers, and society) assessments of the value of ED-based care compared with care in alternative settings. These factors are presented in 3 equations, 1 for each stakeholder, emphasizing how tangible and intangible benefits of care weigh against direct and indirect costs and how each perspective influences value. Aligning value among groups could allow stakeholders to influence each other and could guide rational change in the delivery of acute medical care for low-acuity conditions.

(Am J Manag Care. 2012;18(9):e356-e363)
By adapting an existing analytic model, this paper highlights how key stakeholders (patients, insurers, and society) assess low-acuity medical care, and suggests the following:
  • The value of using the emergency department for low-acuity visits depends on perspective taken.

  • Both perceived and actual benefits and costs may push patients toward a specific setting for low-acuity medical conditions.

  • Modifying the system to create net-positive value for each stakeholder group could increase the likelihood of sustainable change.
Healthcare expenditures in the United States reached $2.6 trillion in 2010, nearly 18% of gross domestic product (GDP).1 Rising costs have led to discussion about value—how invested time, money, and resources improve health. An Institute of Medicine roundtable advocated rewarding “value over volume,” compensating effective care, not “more care.”2 The Affordable Care Act (ACA) also supports the concept through value-based purchasing, accountable care organizations, and bundled-payment programs.3

The role and measurement of value in healthcare is just emerging.4-7 There has been little focus on measuring value in emergency departments (EDs), where 28% of acute care in the United States occurs.8 One subset of ED visits for which value is questioned is low-acuity encounters, often perceived by media, insurers, researchers, and emergency physicians as inefficient resource use.9-12

These visits are controversial for several reasons. Terms like unnecessary, avoidable, preventable, ambulatory-case sensitive, inappropriate, non-urgent, and low-acuity lack precise definitions and are used interchangeably despite subtle differences. They may refer to encounters for conditions that are not life-threatening, not time-sensitive, capable of improving without intervention, or better suited for different settings. They may suggest visits preventable through better primary care or public health measures or those for alternative purposes like seeking food, shelter, or narcotic medication.

Assessing urgency is also itself controversial. Urgency is complicated ex ante by its subjective and dynamic nature. A prudent layperson patient may perceive symptoms as urgent that a doctor does not.13-16 Highly trained providers make inconsistent assessments of urgency at triage,17 and even emergency physicians sometimes alter their initial assessments of urgency after ancillary testing data.14 Urgency is complicated ex post by retrospective measurement. Final diagnoses do not always reflect the potential acuity of presenting complaints.

The estimated range of low-acuity visits (8%-50%) is wide, underscoring the difficulty in quantifying this problem.18-22 The cost associated is unknown, though comparing these figures with total US emergency care expenditures of $51 billion suggests a span of $4 to $26 billion.23 In addition to variability in measuring the impact of low-acuity visits, discussion of this topic often fails to account for perspective—while payers prefer to limit expensive care, patients may desire immediacy or

lack alternatives.

This paper aims to better the understanding of service setting and value for low-acuity encounters by adapting an existing business model to highlight qualitative and quantitative factors that affect key stakeholder perspectives (patients, insurers, and society). Finally, we discuss how aligning value among groups could guide stakeholders to influence each other and create rational change in the delivery of care.

Value Model

In business, it is axiomatic that success requires producing value for customers. Although economics in medicine are distorted by the amorphous nature of health, the disconnect between patient expenses and those of third-party payers, and a lack of transparency, the goal of creating value remains unchanged. The Customer Value Equation by Heskett et al models customer perspective and is used to explain the success of companies in industries from airlines to auto insurers24,25 (Figure 1).

In Heskett’s equation, results are the quantity and quality of products. Process quality is customer experience: tangibles (appearance of personnel/facilities), reliability (dependable, accurate performance), responsiveness (timeliness and willingness to help), assurance (staff knowledge and ability to inspire trust), and empathy (caring, individualized attention).26 Price is what the customer pays for the product. And, access cost denotes what the customer must do to acquire it (travel time).

We adapt this equation to low-acuity encounters to understand how setting and perspective affect value (Figure 2). The numerators represent outputs of care (benefits) and the denominators inputs (costs), highlighting the concept that, regardless of perspective, value varies directly with costs and benefits (Table 1). To simplify discussion, we assume patients desiring care will receive it somewhere and not avoid care entirely.

Patient Value

Conscious and unconscious value assessments guide patients in choosing care setting. Table 2 summarizes variables that impact the Patient Value Equation (PVE). To understand how setting influences these variables, one must consider the characteristics and available resources of each (Table 3).

Output: Outcomes as perceived by patient. Patient perceptions dictate the outcome of the PVE. Some patients are less concerned with traditional quality indicators than the impact on their physical and emotional well-being. For example, a patient with a urinary tract infection may be unaware whether she received the recommended antibiotic; however, she is undoubtedly conscious of whether and how quickly her symptoms subsided.

Patients often equate “more” care with better care.27,28 A patient with an upper respiratory infection may prefer knowing that a chest x-ray is normal to having a clinical diagnosis alone. The result is that immediate capabilities, medications, and onsite consulting specialists in EDs may enhance their appeal.

Output: Patient experience. Patients likewise value the experience associated with obtaining care—distance to care, facility quality, and staff courtesy. Patients cite non-clinical factors as playing a larger role than clinical reputation in guiding care site selection.29,30 A need for after-hours care or safety net, difficulty obtaining traditional appointments, and a desire for immediate care drive patients to the ED.31,32 Over time, patients may also develop loyalty to a particular care site based on positive prior experiences.

Survey data on factors that make patients choose retail and urgent care is lacking. Expanded service hours, same-day access, convenient locations, and minimal wait times could play a role. Yet some patients still prefer EDs to alternative settings. One survey concluded that patients were willing to pay an additional $31 to see physicians in a non-retail setting compared with nurse practitioners in a retail setting.33 Shortages or outright absence of retail and urgent care settings in medically underserved areas may also restrict alternatives to the ED.34

By comparison, office-based practices offer a longitudinal, established relationship with providers. Difficult same-day access may outweigh this benefit. Patients report a willingness to pay an additional $82 to be seen the same day rather than to wait 1 or more days.33 This perspective is understandable considering that patients in significant pain may prefer early evaluation over a familiar provider.

Input: Out-of-pocket costs. The denominator of the PVE includes inputs of care, or costs. Patients are often responsible for only a portion of direct expenses such as deductibles, copayments/coinsurance, and a percentage of charges, depending on insurance status. Premiums likely have less impact on patient value because they are sunk costs already paid and unchanged regardless of utilization.

Some data suggest patient finances have minimal impact on seeking care. In a survey of ED patients, few rated ability to pay as an influence on setting selection despite perception that alternative care sites are cheaper.32 Lack of insurance may not drive ED utilization, as visits have risen most among the insured.35-38 ED visit out-of-pocket payments may be minimal for certain insured patients whose insurers pay the bulk of the cost and for certain uninsured patients whose EDs do not collect payment during the visit or pursue collections aggressively. Although several studies show reduction in ED utilization at higher copayments, the effect has been inconsistent.39-43

Few comparative data are available on the impact of patient costs in alternative settings. Uninsured or underinsured plans may limit access to office-based practices. Insurance coverage for retail visits is limited but expanding.44 However, retail clinic users are less likely to be poor and may be able to afford care regardless of coverage.34 Also, transparent pricing at retail clinics may be alluring, as patients can predict their out-of-pocket payment.

Input: Opportunity costs. Indirect costs of seeking care are an important element of care-setting selection. These opportunity costs include hourly or self-employed workers who lose income receiving treatment during work hours or families who incur child care expenses for similar waits. Treatment in office-based settings may require visits to multiple venues (reference laboratory, outpatient radiology facility, etc) to complete a work-up compared with a single ED visit. Although opportunity costs remain difficult to quantify, they play a role in patient value and should not be ignored.

By comparing patients’ perceptions of benefit and costs of care, the PVE provides a framework to discuss how patients obtain care. It demonstrates that components are dynamic and vary by illness, community, patient personality, and beliefs.

Insurer Value

Despite similarities to the patient equation, the Insurer Value Equation (IVE) reflects several key differences.

Output: Effect on future healthcare use. The numerator still reflects outcomes of care but gauges results by whether they prevent future healthcare consumption and fulfill contractual obligations more than their effect on patients’ physical and emotional states.

Few quality metrics exist for low-acuity conditions; however, 1 study compared ED, urgent care, retail, and outpatient clinic quality and showed similar overall results among the settings, with ED outcomes being slightly poorer than others.45

Little is understood about how low-acuity visits impact future consumption. An upper respiratory infection will likely self-resolve such that receiving care may have little effect on future health. This visit may present scant benefit to the insurer.

Insurer type may also impact benefit. Private insurers and Medicaid presumably see limited enrollment duration and younger populations than Medicare. Treatments and preventive strategies with delayed effects are less likely to affect future healthcare consumption while still enrolled in the former plans. This suggests that private insurers and Medicaid are disproportionately affected by short-term future healthcare consumption while Medicare may inherit long-term consumption.

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