Variation: How It Manifests, Variation: How It Manifests, What to Do About ItWhat to Do About It

Carolyn M. Clancy, MDCarolyn M. Clancy, MDDirectorDirector

Agency for Healthcare Research and QualityAgency for Healthcare Research and Quality

AHA Task Force on Variation in Health Care Spending MeetingAHA Task Force on Variation in Health Care Spending Meeting

Washington, DC – November 10, 2009Washington, DC – November 10, 2009

A Major Public Policy IssueA Major Public Policy Issue

Variation in Care Delivery Variation in Care Delivery and Spendingand Spending

Comparative Effectiveness Comparative Effectiveness Research: Can It Help?Research: Can It Help?

Variation: How It Manifests, Variation: How It Manifests, What to Do About ItWhat to Do About It

The Status Quo Is Not The Status Quo Is Not AcceptableAcceptable

Not Just for Policy WonksNot Just for Policy Wonks

Up to 30 percent of health care Up to 30 percent of health care spending goes toward useless spending goes toward useless treatments that we don’t needtreatments that we don’t need

Overtreatment costs the U.S. Overtreatment costs the U.S. system $700 billion a yearsystem $700 billion a year

““Unnecessary treatment and Unnecessary treatment and tests aren’t just expensive; they tests aren’t just expensive; they also can harm patients.”also can harm patients.”

The Public Is Paying Attention!The Public Is Paying Attention!

June 1 article became June 1 article became required reading in the required reading in the White HouseWhite House

McAllen, TX, is the McAllen, TX, is the second most expensive second most expensive health care market in health care market in the USA: why?the USA: why?

Medicare spending half Medicare spending half of that of El Paso, TX, of that of El Paso, TX, despite similar despite similar community profilescommunity profiles

Health Care Spending Per CapitaHealth Care Spending Per Capita

Source: Congressional Source: Congressional Research Service. Research Service. Washington, DC. Pub No. Washington, DC. Pub No. RL34175RL34175

Based on 2003 data from Based on 2003 data from the Organisation for the Organisation for Economic Co-operation Economic Co-operation and Development (OECD)and Development (OECD)

Pharmaceutical Spending Per CapitaPharmaceutical Spending Per Capita

Source: Congressional Source: Congressional Research Service. Research Service. Washington, DC. Pub No. Washington, DC. Pub No. RL34175 RL34175

Based on OECD data 2006Based on OECD data 2006

Global Trends inGlobal Trends inHealth ExpendituresHealth Expenditures

From: http://From: http://www.oecd.org/document/16/0,3343,en_2649_34631_2085200_1_1_1_1,00.htmlwww.oecd.org/document/16/0,3343,en_2649_34631_2085200_1_1_1_1,00.html

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1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2006

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Australia

Canada

France

Germany

Italy

Japan

Korea

Mexico

Poland

Spain

Sweden

Turkey

United Kingdom

United States

Per Capita Medicare Spending: Per Capita Medicare Spending: Regional VariationsRegional Variations

From: From: Congressional Congressional Budget Office. Budget Office. Research on Research on Comparative Comparative Effectiveness of Effectiveness of Medical Medical Treatments. 2008Treatments. 2008

How Do They Do That?How Do They Do That?

Lowest region in state (actual-expected)Lowest region in state (actual-expected) La Crosse, WILa Crosse, WI Portland, ME (one of only two HRRs in Maine)Portland, ME (one of only two HRRs in Maine) Asheville, NCAsheville, NC

Actual cost < expectedActual cost < expected Temple, TX (second lowest after Lubbock)Temple, TX (second lowest after Lubbock) Everett, WA (second lowest after Spokane)Everett, WA (second lowest after Spokane)

Four are problematicFour are problematic Richmond, VA (highest actual-expected in state)Richmond, VA (highest actual-expected in state) Sacramento, CA (actual > expected)Sacramento, CA (actual > expected) Cedar Rapids, IA (actual > expected, but in a low-cost state)Cedar Rapids, IA (actual > expected, but in a low-cost state) Tallahassee, FL (actual > expected)Tallahassee, FL (actual > expected)

Source: Source: Calculations from HCUP data using Dartmouth Atlas regions Calculations from HCUP data using Dartmouth Atlas regions http://www.ihi.org/IHI/Programs/StrategicInitiatives/HowDoTheyDoThat.htm?TabId=0http://www.ihi.org/IHI/Programs/StrategicInitiatives/HowDoTheyDoThat.htm?TabId=0

Multi-stakeholder effort examining high-performing regionsMulti-stakeholder effort examining high-performing regions

Variation in Employer-Sponsored Variation in Employer-Sponsored Health InsuranceHealth Insurance

Among the 116.1 million private sector Among the 116.1 million private sector employees in the USA, 87.7 percent employees in the USA, 87.7 percent worked where employer-sponsored worked where employer-sponsored health insurance was offered in 2008health insurance was offered in 2008

For the 10 largest metro areas, For the 10 largest metro areas, premiums for single coverage ranged premiums for single coverage ranged from $3,857 to $4,874 in 2008from $3,857 to $4,874 in 2008

For the 10 largest metro areas, For the 10 largest metro areas, premiums for family coverage ranged premiums for family coverage ranged from $11,454 to $13,835 in 2008from $11,454 to $13,835 in 2008

Crimmel BL. Crimmel BL. Offer Rates, Offer Rates, Take-Up Rates, Premiums, Take-Up Rates, Premiums, and Employee and Employee Contributions for Contributions for Employer- Sponsored Employer- Sponsored Health Insurance in the Health Insurance in the Private Sector for the 10 Private Sector for the 10 Largest Metropolitan Largest Metropolitan Areas, 2008. MEPS Areas, 2008. MEPS Statistical Brief #261, Statistical Brief #261, September 2009September 2009

Variation in Family PremiumsVariation in Family Premiums

Health Care Spending Per Capita Health Care Spending Per Capita and Life Expectancyand Life Expectancy

Source: Congressional Source: Congressional Research Service. Research Service. Washington, DC. Pub Washington, DC. Pub No. RL34175.No. RL34175.

Based on OECD data Based on OECD data 20062006

Higher Prices Higher Prices Don’t Always Mean Better CareDon’t Always Mean Better Care

New York Times, September 8, 2009New York Times, September 8, 2009

$10,000

$9,000

$8,000

$7,000

$6,000

$5,00025 30 35 40 45 50 55 60 65 70 75

Medicare Spending Per Beneficiary, 2006 (according to the Dartmouth Atlas of Health Care)

Overall Quality of Health Care, 2008 (measures compiled by the federal Agency for Healthcare Research and QualityLower Average Higher

AHRQ’s National Reports on AHRQ’s National Reports on Quality and DisparitiesQuality and Disparities

The median annual rate of The median annual rate of change for all change for all qualityquality measures was 1.4%measures was 1.4%– Of 190 measures, 132 (69%) Of 190 measures, 132 (69%)

showed some improvement showed some improvement

Some reductions in Some reductions in disparitiesdisparities of care of care according to race, ethnicity, according to race, ethnicity, and incomeand income– Inequities persist in health Inequities persist in health

care quality and accesscare quality and access

Geographic variation in practice patternsGeographic variation in practice patterns

– Poor relationship between costs and outcomesPoor relationship between costs and outcomes

– Need to establish best practicesNeed to establish best practices

Cost containment Cost containment

– Recognition of limited resources Recognition of limited resources

System managementSystem management

– Improved management, accountabilityImproved management, accountability

The Outcomes MovementThe Outcomes Movement

A. Epstein, NEJM 1990A. Epstein, NEJM 1990

Comparative Effectiveness Comparative Effectiveness and the Recovery Act and the Recovery Act

The American Recovery and The American Recovery and Reinvestment Act of 2009 includes Reinvestment Act of 2009 includes $1.1 billion for comparative $1.1 billion for comparative effectiveness research:effectiveness research:

– AHRQ: $300 millionAHRQ: $300 million

– NIH: $400 million (appropriated to NIH: $400 million (appropriated to AHRQ and transferred to NIH)AHRQ and transferred to NIH)

– Office of the Secretary: $400 million Office of the Secretary: $400 million (allocated at the Secretary’s discretion)(allocated at the Secretary’s discretion)

Federal Coordinating Council appointed to coordinate comparative Federal Coordinating Council appointed to coordinate comparative effectiveness research across the federal governmenteffectiveness research across the federal government

AHRQ’s Priority Conditions for AHRQ’s Priority Conditions for the Effective Health Care Programthe Effective Health Care Program

Arthritis and non-Arthritis and non-traumatic joint disorderstraumatic joint disorders

CancerCancer Cardiovascular disease, Cardiovascular disease,

including stroke and including stroke and hypertensionhypertension

Dementia, including Dementia, including Alzheimer DiseaseAlzheimer Disease

Depression and other Depression and other mental health disordersmental health disorders

Developmental delays, Developmental delays, attention-deficit attention-deficit hyperactivity disorder hyperactivity disorder and autism and autism

Diabetes MellitusDiabetes Mellitus Functional limitations Functional limitations

and disabilityand disability Infectious diseases Infectious diseases

including HIV/AIDSincluding HIV/AIDS ObesityObesity Peptic ulcer disease Peptic ulcer disease

and dyspepsiaand dyspepsia Pregnancy including Pregnancy including

pre-term birthpre-term birth Pulmonary Pulmonary

disease/Asthmadisease/Asthma Substance abuseSubstance abuse

IOM’s 100 Priority TopicsIOM’s 100 Priority Topics

Topics in 4 quartiles; groups of 25. Topics in 4 quartiles; groups of 25. First quartile is highest priority. Included in first First quartile is highest priority. Included in first

quartile:quartile:– Compare the effectiveness of screening, Compare the effectiveness of screening,

prophylaxis and treatment interventions for prophylaxis and treatment interventions for eradicating MRSAeradicating MRSA

– Compare the effectiveness of strategies for Compare the effectiveness of strategies for reducing HAIsreducing HAIs

– Compare the effectiveness of genetic and Compare the effectiveness of genetic and biomarker testing and usual care in preventing biomarker testing and usual care in preventing and treating clinical conditions for which and treating clinical conditions for which biomarkers existbiomarkers exist

Initial National Priorities for Comparative Effectiveness Initial National Priorities for Comparative Effectiveness Research Research http://www.iom.eduhttp://www.iom.edu

Office of the Secretary’s Spend Plan Office of the Secretary’s Spend Plan for Recovery Act CER Fundingfor Recovery Act CER Funding

Designed to complement AHRQ and NIH activitiesDesigned to complement AHRQ and NIH activities– Data Infrastructure:Data Infrastructure: Identify unique high-level Identify unique high-level

opportunities to build the foundation for sustainable opportunities to build the foundation for sustainable CER infrastructure to fundamentally change the CER infrastructure to fundamentally change the landscapelandscape

– Dissemination, Translation and Implementation:Dissemination, Translation and Implementation: Innovative strategies that go beyond evidence Innovative strategies that go beyond evidence generation and lead to improved health outcomesgeneration and lead to improved health outcomes

– Priority Populations and Interventions:Priority Populations and Interventions: Coordination of efforts across multiple activities to Coordination of efforts across multiple activities to include subgroups that traditionally have been include subgroups that traditionally have been under-represented in research activityunder-represented in research activity

Specific Investments (Examples)Specific Investments (Examples)

Data InfrastructureData Infrastructure– Enhance Availability and Use of Medicare Data to Support Enhance Availability and Use of Medicare Data to Support

Comparative Effectiveness ResearchComparative Effectiveness Research

– Distributed Data Research Networks, Including Linking DataDistributed Data Research Networks, Including Linking Data

Dissemination and TranslationDissemination and Translation – Dissemination of CER to Physicians, Providers, Patients and Dissemination of CER to Physicians, Providers, Patients and

Consumers Through Multiple Vehicles Consumers Through Multiple Vehicles

– Accelerating Dissemination and Adoption of CER by Delivery Accelerating Dissemination and Adoption of CER by Delivery Systems Systems

ResearchResearch– Optimizing the Impact of Comparative Effectiveness Research Optimizing the Impact of Comparative Effectiveness Research

Findings through Behavioral Economic RCT ExperimentsFindings through Behavioral Economic RCT Experiments– Comparative Effectiveness Research on Delivery Systems Comparative Effectiveness Research on Delivery Systems

AHRQ Spend Plan for Recovery AHRQ Spend Plan for Recovery Act’s CER FundingAct’s CER Funding

Stakeholder Input and Involvement:Stakeholder Input and Involvement: To occur To occur throughout the programthroughout the program

Horizon Scanning:Horizon Scanning: Identifying promising Identifying promising interventionsinterventions

Evidence Synthesis:Evidence Synthesis: Review of current research Review of current research

Evidence Generation:Evidence Generation: New research with a New research with a focus on under-represented populationsfocus on under-represented populations

Research Training and Career Development:Research Training and Career Development: Support for training, research and careersSupport for training, research and careers

The Right Treatment for the Right Patient at the Right Time

Translating the Science into Translating the Science into Real-World Applications Real-World Applications

Examples of Recovery Act Evidence Generation Examples of Recovery Act Evidence Generation projects:projects:– Clinical and Health Outcomes Initiative in Comparative Clinical and Health Outcomes Initiative in Comparative

Effectiveness (CHOICE): First coordinated national effort Effectiveness (CHOICE): First coordinated national effort to establish a series of pragmatic clinical comparative to establish a series of pragmatic clinical comparative effectiveness studies ($100M)effectiveness studies ($100M)

– Request for Registries: Up to five awards for the creation Request for Registries: Up to five awards for the creation or enhancement of national patient registries, with a or enhancement of national patient registries, with a primary focus on the 14 priority conditions ($48M)primary focus on the 14 priority conditions ($48M)

– DEcIDE Consortium Support: Expansion of multi-center DEcIDE Consortium Support: Expansion of multi-center research system and funding for distributed data network research system and funding for distributed data network models that use clinically rich data from electronic health models that use clinically rich data from electronic health records ($24M)records ($24M)

Additional Proposed InvestmentsAdditional Proposed Investments

Supporting AHRQ’s long-term commitment to Supporting AHRQ’s long-term commitment to bridging the gap between research and practice:bridging the gap between research and practice:– Dissemination and TranslationDissemination and Translation

Between 20 and 25 two-three-year grants ($29.5M)Between 20 and 25 two-three-year grants ($29.5M) Eisenberg Center modifications (3 years, $5M)Eisenberg Center modifications (3 years, $5M)

– Citizen Forum on Effective Health CareCitizen Forum on Effective Health Care Formally engages stakeholders in the entire Effective Formally engages stakeholders in the entire Effective

Health Care enterpriseHealth Care enterprise A Workgroup on Comparative Effectiveness will be A Workgroup on Comparative Effectiveness will be

convened to provide formal advice and guidance ($10M)convened to provide formal advice and guidance ($10M)

Opportunities for HospitalsOpportunities for Hospitals

CER can:CER can:

Provide evidence to inform Provide evidence to inform choices of drugs, deviceschoices of drugs, devices

Enhance potential for Enhance potential for understanding how research can understanding how research can benefit diverse populations and benefit diverse populations and engage communities engage communities

Help develop infrastructure, Help develop infrastructure, training, registries, and non-training, registries, and non-government investment for future government investment for future researchresearch

Thank You Thank You

www.ahrq.gov www.ahrq.gov

www.hhs.gov/recoverywww.hhs.gov/recovery