There's a long list ofcauses perpetuating the prevalence of inappropriate care, includingfee-for-service payment models, defensive medical practices,cultural practices and even consumer marketing. (Photo:Shutterstock)

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Unnecessary health care services represents27.5 percent of the exorbitant costs of health care—$750 billion isspent annually on unnecessary or inefficient care. For employerslooking to bring their health care spending into check, bringing thesenumbers down is a good place to start.

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A recent webinar presented by Catalyst forPayment Reform tackled the issue of inappropriate care andstrategies major employers are successfully using to combat theissue–and save money.

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“This is a problem that's not going to go away on its own,”noted Catalyst's Suzanne Delbanco. “There's a lot we need to putinto place in terms of structure, process and even the right incentives.

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Related: 20 conditions top U.S. health carespending

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Inappropriate care covers a variety of services, fromunnecessary tests and surgeries to over-prescribing antibiotics topainkillers. One of the main problems, however, is that there's nodefinite line that separates “appropriate” from “inappropriate”care–there's a grey area that might be deemed appropriate in onecase but not another. “Studying appropriateness is challenging: itrefers to any individual patient, not the population,” Bob Berensonof the Urban Institute told the audience. “One needs a lot ofclinical detail that isn't available from administrative data suchas claims.”

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Berenson pointed to a long list of causes perpetuating theprevalence of inappropriate care, including fee-for-service paymentmodels, defensive medical practices, cultural practicesand even consumer marketing. Then, there's the disconnect betweenthe consumer and the entity ultimately responsible for paying thebill: “When somebody else is paying, both the doctor and patientmay be less concerned about the cost,” Berenson said.

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All of this points to a greater need for accountability on thepart of providers, education on the part of consumers, greaterprice transparency and financial incentives. There are a variety ofways to approach these issues, and representatives from Walmart,Google, AT&T and Washington State Health Care Authority allshared ways their organizations are tackling inappropriatecare.

1. Walmart sends employees to Centers of Excellence

One way to minimize spending on unnecessary or inappropriatecare is to start with a provider that has a reputation of highvalue to begin with.

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“We're serving about a million plan participants on our healthplan,” Lisa Woods, senior director health care benefits for Walmartsaid. “We talk a significant amount about appropriateness of care.For us, diagnosis has to be right and treatment plan has to beright.”

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Walmart has created its own proprietary tool to identify what itconsiders Centers of Excellence based on a long list offactors. When an employee needs to have a procedure done, they'reencouraged to use a facility that meets the criteria. There's afinancial incentive, of course: If they opt for care at a COE, itwill be 100 percent covered, but if they opt for their ownprovider, they have to pay a share.

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“We have seen where associates who were told in their homecommunity that they needed surgery and traveled to a COE, more than50 percent were told they did not need surgery,” Woods said.“Making sure we get the diagnosis right is absolutelycritical.”

2. Google's focus on redirecting low-value services

While Walmart focused on high-dollar surgeries, Google is tryinga strategy that is more in line with its company demographics—mostare younger and healthy—and its own tech-savvy resources.

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After realizing that its employees were averaging 10office-visit claims each—compared to Anthem's average of 6 forother companies—the company launched an initiative to encourage itsemployees to take advantage of higher-value but under-utilizedprograms like telemedicine, said Rob Paczkowski, calculatingthat redirecting 50 percent of visits could result in an 8 percentsavings.

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But how to get employees to change their behavior? The companychanged how it communicated with employees about services,including allowing the health care vendors to message employeesdirectly, sending out more-targeted communications, and, notably,using its own Google Assistant and Google Home hardware to helpemployees find care and answer questions.

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“What we've been able to do, just in this 12 month period, isredirect 10,000 visits for a savings of $1.4 million,” Paczkowskisaid.

3. AT&T brings in expert second opinions

With misdiagnoses playing such a significant factor in healthcare waste, encouraging consumers to get a second opinion just seems like a no-brainer.Given the complexity of the health care system already, however,such a task is daunting and confusing for many consumers. That'swhy AT&T decided to create a program that would make theprocess easier and ensure the second opinion was coming from areputable expert.

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Through the program, members are able to reach out privately torequest an expert second opinion, granting access to his or herrelevant medical information for a team to review. “Once all thedata is gathered, the expert can start the review and provide awritten report,” explained Cynthia Almanza, noting the processtakes two to four weeks, depending on the complexity of the case.”From there, you can take the review and share it with your localphysician and determine what is the best course of action.”

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Since launching earlier this year, the program has provided 200second opinions; diagnoses were revised in 30 percent of cases, andtreatment plans adjusted in 70 percent. Notably, the most commonsecond-opinions were related to back and spine issues, and theservice saw the highest utilization among 55-64 age group, Almanzasaid.

4. Washington State Health Care Authority's shareddecision-making program

While health care spending is a significant aspect of businessfor the other companies represented in the webinar, for WashingtonState Health Care Authority, it is their business. It purchaseshealth care on behalf of more than 2 million Washington residentsrepresenting Medicaid recipients, public employees and educationalworkers.

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One strategy it has had success with in reducing health carewaste is shared decision-making, which associate medical directorEmily Transue explained is “a process in which clinicians andpatients work together to make decisions and select tests,treatments and care plans based on clinical evidence.”

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The collaborative approach not only reduces overutilization ofhealth services but can also correct for under-utilization, Transuenoted. “If you give patients the opportunity to really think aboutwhat's worth it them and understand what they're getting into, theywill make appropriate choices.”

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It sounds like a simple approach, but it requires a lot ofrethinking and rewiring on the part of the provider. “If you walkinto a group of physicians and ask if they do SDM, they all raisetheir hands, but you have to really delve into what it is beforethe light bulb goes off and they say, actually I haven't reallybeen doing that,” Transue said.

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They worked with providers at three sites to implement a SDMapproach for OB care for its public employees. They worked withproviders to educate them in the principles of SDM and adjust theirworkflows accordingly, resulting in better, more-informed healthcare decisions for the patients involved.

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Emily Payne

Emily Payne is director, content analytics for ALM's Business & Finance Markets and former managing editor for BenefitsPRO. A Wisconsin native, she has spent the past decade writing and editing for various athletic and fitness publications. She holds an English degree and Business certificate from the University of Wisconsin.