Business Group Blog

3 Strategies Employers Can Use to Reduce Overtreatment

Overtreatment

Respondents estimated that 24.9% of medical tests are unnecessary, and 70.8% believed that that physicians are more likely to perform unnecessary procedures when they profit from them.

According to a study published this month, physicians estimate that 20.6% of overall medical care is unnecessary. Researchers from Harvard Medical School and Johns Hopkins University School of Medicine interviewed 2,106 doctors from across the United States, asking them about the prevalence and causes of overtreatment. Particularly striking, the respondents estimated that 24.9% of medical tests are unnecessary, and 70.8% believed that that physicians are more likely to perform unnecessary procedures when they profit from them.

The findings bolster what we’ve known for years: overtreatment and waste is prevalent in the U.S. health care system. In 2012, an Institute of Medicine (IOM) report estimated that one third of spending on health care – about $750 billion per year – doesn’t make people healthier. A significant portion of the problem, the IOM concluded, were the same unnecessary services referenced in the new study, but the IOM also pointed toward inefficiency, too-high prices, excessive administrative costs, and fraud as drivers of wasted spending.

In the September 2017 study, physicians reported several key reasons for overtreatment:

  • Fear of malpractice lawsuits (84.7%);
  • Pressure from patients to perform tests or procedures (59%); and
  • Difficulty accessing medical records, leading to duplicate testing (38.2%).

 

3 Strategies Employers Can Use to Reduce Overtreatment

 

1. Change Incentives

Change incentives in the health care system by contracting with accountable care organizations (ACOs), patient-centered medical homes (PCMHs), centers of excellence (COEs), and other health systems that are re-orienting physician payment toward value, rather than fee-for-service. According to the 2018 Large Employers’ Plan Design and Health Care Strategy Survey of NBGH employer members, a growing number of employers are steering their employees toward ACOs and COEs, and over a third of COEs are reimbursed through bundled payments that reward positive outcomes and efficient care.

Employers' Strategies Regarding ACOsCenters of Excellence- COEs- Plan Design Survey 2018

 

2. Contract with Leading Health Systems

Contract with health plans and providers that use integrated electronic health systems that can speak to each other to reduce the likelihood of duplicative testing. This is a key element to look for in high-performing ACOs. Learn more using the Business Group’s ACO Toolkit.

3. Educate Employees

Educate and engage employees about appropriate and efficient use of the health care system. For example, the Business Group has partnered with Consumer Reports to disseminate lessons from Choosing Wisely in a consumer-friendly way that may reduce some of the patient pressure for unnecessary services.

 

Members—for more ideas on how to reduce overtreatment, check out these resources: