FluidEdge Consulting Partners with VBID Health, Produces Whitepaper on Wasted Healthcare Spending
December 30, 2016
FluidEdge recently partnered with Value Based Insurance Design (VBID) Health to analyze self-insured employer data provided by the American Health Policy Institute (AHPI) , which totaled $10.0 billion in healthcare claims.
The project found $2.0 billion in wasted healthcare spending among 35 companies, which is roughly 20 percent of the total spending by the businesses.
“With an ever-shrinking bottom line and increased local market competition, the healthcare market demands companies to be more efficient and reduce unnecessary costs.” said Paul Manz, FluidEdge Consulting’s Practice Leader of Informatics & Reimbursement and lead FluidEdge consultant on the AHPI study.
FluidEdge and VBID Health placed the wasted funds into four areas: pharmacy; inpatient; outpatient; and administrative.
According to the report, “Pharmacy, which was determined to generate 4% wasteful spending, suffered from problems such as over-prescription and non-adherence to drug regimes. Inpatient, generating 6% wasteful spending, was beset by problems such as medical errors, preventable admissions, and hospital acquired infections. Outpatient, which at 9% generated the highest waste score of the top categories, faced the problems of missed prevention opportunities and defensive medicine. Finally, administration, which at 2% wasteful spending was lower than the other main categories, had to cope with inefficient claims processing and excessive complexity.”
The report also offered various solutions for reducing unnecessary costs, including informatics and data warehousing, value-based payments, plan design to optimize efficiency, predictive modeling and risk scoring, and administrative efficiency.
According to Manz, the findings of the study will help FluidEdge’s clients narrow down areas of improvement in support of their strategic goals and financial targets.
“We have an evaluation methodology for improving our client’s bottom line, and based on this study, we can enhance the model by reviewing each client’s specific needs and determining which area of cost reduction they should focus on,” said Manz.
The findings of the study were published in a white paper on AHPI’s website, and can be found here.