← Becker’s Healthcare Podcast
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- [00:00]
A
Welcome everyone to a special edition of the Becker's Healthcare Podcast series. Today we'll be diving into a conversation with Sierra Garvin, the Senior Associate Director of Above Brand Marketing at Behringer Ingelheim, and Manny Leonard, Senior Director of Drug Use Policy and Formulary Management at Cleveland Clinic, as featured on Behringer Ingelheim's InFocus podcast. We hope you enjoy this special episode.
- [00:29]
B
Hello and welcome to Series three of the Info Podcast, brought to you by Behringer Ingelheim. If you haven't already listened to the first two series on population health management and transitions of care, make sure to check them out@strategiesforqualitycare.com today. You're listening to the first of four episodes which focuses on strategies for reducing the total cost of care, a growing concern for healthcare organizations today. I'm Sierra Garvin, Senior Associate Director of Above Brand Marketing, and I'll be your host for this series. It's widely recognized that the high cost of healthcare in the US Is unsustainable and disrupts economic stability with negative consequences for patients, payers, health systems, industries and society, even causing some patients to forego needed health care. To reduce the total cost of care, it's important to understand the drivers of healthcare expenditures and to adopt innovations that reduce costs without reducing care quality. As we dive into the discussion of cost and strategies in this series, we'll be joined by four subject matter experts who will share information about the causes and impact of high healthcare costs and the ways to reduce them. We'll also hear about real world approaches that can help reduce the total cost of care. These subject matter experts are Mandi Leonard, Senior Director of Drug Use Policy and Formulary Management at Cleveland Clinic Dr. Nihar Desai, an Associate professor of Medicine and Vice Chief of the Section of Cardiovascular Medicine at Yale University school of medicine Dr. Andrew Freeman, director of Clinical Cardiology and Cardiovascular Prevention and Wellness at National Jewish Health and Kim Newland, a cardiovascular nurse practitioner and clinical performance improvement Consultant at Sutter Health. For this first episode, we'll talk with expert Mandy Leonard to explore the systemic and disease related drivers behind high healthcare costs. Welcome to the series, Mandy, and thank you for joining us.
- [02:34]
C
Hi Sierra, thanks for having me.
- [02:37]
B
Mandy, with your background and experience managing drug related costs for 25 years at the Cleveland Clinic, could you start by providing us with an overview of healthcare spending?
- [02:48]
C
Certainly. To begin with, the US Spends more on healthcare than any other nation. For example, healthcare spending accounted for nearly 18% of our GDP in 2023 and spending is expected to grow almost 6% from 2023 to 2032, the federal government is responsible for nearly one third of healthcare expenditures. And what's most unfortunate is, is that despite our larger expenditures, the US Ranks behind other countries in key health metrics, such as life expectancy, obesity rates, infant mortality, and hospital admissions for diabetes.
- [03:27]
B
That's really surprising that despite the large expenditures, the U.S. ranks behind other countries in key health metrics. So what's driving this significant increase in the cost of healthcare?
- [03:38]
C
Well, some of the biggest drivers are the increasing age of the population, high hospital readmission rates, and patients who are high utilizers of healthcare. For example, the portion of the population age 65 and older is increasing, and projections suggest they'll account for more than 20% of the population in 2032. And in terms of high utilization, just 5% of the US population is responsible for nearly half of all healthcare spending. Older adults and those with serious chronic illnesses are some of the biggest users of healthcare, and they require more frequent and costlier treatments.
- [04:18]
B
I can understand how these factors would contribute to the increase in cost, especially with chronic conditions. Could you share more about the role that chronic conditions play in driving up costs?
- [04:29]
C
Absolutely. According to a report for the Centers for Disease Control and prevention, about 90% of US healthcare spending involves chronic and mental health conditions, and about 60% of Americans have at least one chronic disease. Additionally, patients with chronic diseases account for the vast majority of hospitalizations and filled prescriptions.
- [04:51]
B
Wow. Chronic diseases and mental health conditions seem to account for an extremely large portion of healthcare spending. Do modifiable risk factors play a role in this?
- [05:01]
C
They sure do. Modifiable risk factors play a significant role in chronic diseases. In one study, some of the modifiable risk factors that were associated with the highest spending were high body mass index, high systolic blood pressure, high fasting plasma glucose, dietary risks, and tobacco smoke. Most of the spending related to these risk factors was in patients age 65 and older. In the same study, certain chronic conditions were found to have healthcare costs that could be attributed to modifiable risk factors. These included musculoskeletal disorders, chronic respiratory diseases, digestive diseases, mental health and substance use disorders, and neurological disorders.
- [05:47]
B
Are those the most costly chronic conditions?
- [05:50]
C
That's a great question. All chronic conditions contribute to high healthcare expenditures, but cardiovascular diseases, cancer, diabetes, chronic kidney disease, and autoimmune diseases are among the most common and costly. Let me present some facts to you. First, cardiovascular diseases are the leading cause of death and cost over $250 billion annually to treat. And secondly, more than 135 million Americans are living with diabetes or pre diabetes, resulting in the astounding annual cost of $413 billion.
- [06:29]
B
Those are staggering numbers. If someone has multiple chronic conditions, does the impact also multiply?
- [06:36]
C
Most definitely. Having multiple chronic conditions leads to worsening patient outcomes and higher costs. Managing chronic conditions is difficult and costly. And over 55% of Americans have multiple chronic conditions or what we'd call MCCs. These are associated with higher mortality rates as well as reduced health related quality of life, increased healthcare use and costs.
- [07:04]
B
It's unfortunate that so many Americans suffer from multiple chronic conditions. What are some of these combinations and why are they so expensive to treat?
- [07:13]
C
Some of the most common and expensive combinations include diabetes, cardiovascular diseases, including heart failure and hypertension, as well as chronic obstructive pulmonary disease. The most expensive two way combination is heart failure and cardiovascular diseases, which is associated with annual medical costs of over $30,000 per patient. Other costly MCC combinations include cardiovascular disease with diabetes, arthritis, asthma or chronic obstructive pulmonary disease. An additional costly combination includes diabetes with either depression or anxiety. The high costs are due in part to the complexity of treating multiple conditions simultaneously. This typically involves prescribing several medications and following various and sometimes conflicting clinical practice guidelines, which can often complicate treatment decisions and lead to poor long term outcomes. One potential solution is for the experts to develop joint clinical guidelines for some of the most common MCC combinations.
- [08:21]
B
It would be great to see that happen. Are there any other conditions that have a high cost burden on healthcare?
- [08:28]
C
There certainly are. Rare diseases also contribute to high expenditures. A rare disease is any disease that affects fewer than 200,000 patients. While the population that has each of these diseases is small, the collective population is estimated at 25 to 30 million. Since there are up to nearly 10,000 rare diseases. In one study, the economic burden of rare diseases was estimated to be nearly $1 trillion. And this estimate was only based on the associated costs of just under 380 rare diseases. So it doesn't account for all of the rare diseases. The economic burden created by the direct cost for rare diseases is $449 billion. And the indirect cost burden isn't far off from that at $437 billion. Since a rare disease may increase the chances of having a severe functional impairment or disability that can actually prevent patients from gaining work and staying employed. Indirect costs are primarily driven by productivity and opportunity losses.
- [09:35]
B
That's a tough reality for many. Are there reasons outside of disease states that contribute to the rising costs of healthcare?
- [09:43]
C
Well, that's another great Question Sierra and the answer is yes. A significant portion of healthcare spending is wasteful, which is defined as spending that can be reduced or eliminated without adversely affecting the quality of care or health outcomes. A review article published by JAMA in 2019 found that wasteful spending accounted for about 25% of all healthcare expenditures at that time. To expand further on wasteful spending, the main drivers are called out as six different domains. The first is failure of care delivery. This includes hospital acquired conditions and adverse events, clinician related inefficiencies and the lack of adoption of preventative care practices. Second is failure of care coordination. This category includes unnecessary admissions, avoidable complications and readmissions. The third category is over treatment or low value care which includes low value medication use, low value screening, testing or procedures, and overuse of end of life care. Fourth is pricing failure. This includes medication, laboratory, outpatient and payer based health service pricing failures. Fifth, there's fraud and abuse, including in Medicare. And lastly there's administrative complexity. This final category includes billing and coding waste and physician time spent reporting on quality measures. Interventions have been proposed to address this wasteful spending and it's been estimated that they would reduce the total cost of waste by about 25%.
- [11:22]
B
Wow. Clearly there is a lot to do to help reduce healthcare expenditures. We thank you Mandy for joining us today and providing a comprehensive review of what drives these costs.
- [11:33]
C
And thanks for having me, Sierra. I truly enjoyed spending time with you today.
- [11:38]
B
It's been a great discussion. Thank you. As you've heard from our discussion today, preventing the total cost of healthcare from continually increasing presents a major challenge. Fortunately, the challenge is being taken up by organizations that are adopting newer methods that help reduce costs without impacting care quality. With that, we encourage you to join us for our next episode where we discuss value based care and the opportunities this method provides to reduce overall healthcare costs. Together, we can make a meaningful impact on the future of healthcare. Thank you for joining us.
- [12:21]
C
Foreign.
- [12:27]
A
Thank you Sierra, Mandy for your time and insights today. And we also want to thank our podcast sponsor Baringer Ingelheim. You can tune in to more podcasts from Becker's Healthcare by visiting our podcast page@beckershospitalreview.com.