Chapter 7. Efficiency

National Healthcare Disparities Report, 2011

Health care cost increases continue to outpace the rise in wages, inflation, and economic growth. One approach to containing the growth of health care costs is to improve the efficiency of the health care delivery system. This approach would allow finite health care resources to be used in ways that best support high-quality care.

Recent work examining variations in Medicare spending and quality shows that higher cost providers do not necessarily provide higher quality care, illustrating the potential for improvement (Fisher, et al., 2003). Improving efficiency in the Nation's health care system is an important component of Department of Health and Human Services (HHS) efforts to support a better health care system.

Measures

Part of the discussion about how to improve efficiency involves the question about how best to measure it. Varying perspectives and definitions of health care efficiency exist; although consensus has not yet emerged on what constitutes appropriate measurement of efficiency, AHRQ has supported development in this area. This chapter has been largely shaped by a number of documents that have developed the field of health care efficiency measurement. One major contributor is an AHRQ-commissioned report by RAND Corporation, which systematically reviewed efficiency measures, assessed their tracking potential, and provided a typology that emphasizes the multiple perspectives on health care efficiency (McGlynn, 2008).

This chapter of the National Healthcare Disparities Report (NHDR) is organized around the concepts of overuse and misuse. As noted in the National Strategy for Quality in Health Care,i "Achieving optimal results every time requires an unyielding focus on eliminating patient harms from health care, reducing waste, and applying creativity and innovation to how care is delivered."

The measures this year are presented in the following layout:

  • Inappropriate medication use:
    • Adults age 65 and over who received potentially inappropriate prescription medications.
  • Preventable hospitalizations:
    • Potentially avoidable hospitalization rates for adults.
    • Excess avoidable hospitalizations.
    • Potentially avoidable hospitalizations among Medicare home health patients.
  • Perforated appendixes.
  • Potentially harmful preventive services with no benefit:
    • Males age 75 and over who had a prostate-specific antigen (PSA) test or a digital rectal exam (DRE) within the last 12 months.

Findings

Inappropriate Medication Use

Some drugs are potentially harmful for older patients but nevertheless are prescribed to them (Zhan, et al., 2001).ii Using inappropriate medications can be life threatening and may result in hospitalization (Lau, et al., 2005). To measure inappropriate medication use, we have followed the Beers criteria, which have been generally accepted by the medical community and by expert opinion, although there is still some disagreement. This disagreement relates to the many factors that must be considered when identifying what constitutes inappropriate use by certain populations (Zhan, et al., 2001).

Figure 7.1. Adults age 65 and over who received potentially inappropriate prescription medications in the calendar year, by race/ethnicity and gender, 2002-2008

Figure 7.1. Adults age 65 and over who received potentially inappropriate prescription medications in the calendar year, by race/ethnicity and gender, 2002-2008. For details, go to [D] Text Description below.     Figure 7.1. Adults age 65 and over who received potentially inappropriate prescription medications in the calendar year, by race/ethnicity and gender, 2002-2008. For details, go to [D] Text Description below.

[D] Select for Text Description.

Source: Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey, 2002-2008.
Denominator: Civilian noninstitutionalized population age 65 and over.
Note: For this measure, lower rates are better. Prescription medications received include all prescribed medications initially purchased or otherwise obtained, as well as any refills. Whites and Blacks are non-Hispanic. Hispanic includes all races.

  • From 2003 to 2005, the percentage of older patients who received at least 1 of 33 potentially inappropriate drugs was significantly lower for Hispanics than for Whites. For the rest of the period, there were no statistically significant differences (Figure 7.1).
  • From 2002 to 2008, the percentage of adults age 65 and over that received potentially inappropriate medications decreased from 19% in 2002 to 13% in 2008 (data not shown).
  • There was a consistent gap between males and females, with females having higher rates of inappropriate medications. In 2008, the rate for females was 16% and 11% for males.

Also, in the National Healthcare Quality Report (NHQR):

  • From 2002 to 2008, there were no consistent gaps between patients with Medicare and private insurance and those with Medicare only or with Medicare and other public insurance.

Preventable Hospitalizations

New! Potentially Avoidable Hospitalization Rates for Adults

Hospitalization is expensive. Preventing avoidable hospitalizations could improve the efficiency of health care delivery. To address potentially avoidable hospitalizations from the population perspective, data on ambulatory care-sensitive conditions are summarized here using the AHRQ Prevention Quality Indicators (PQIs). Not all hospitalizations that the AHRQ PQIs track are preventable. But ambulatory care-sensitive conditions are those for which good outpatient care can prevent the need for hospitalization or for which early intervention can prevent complications or more severe disease.

The AHRQ PQIs track these conditions using hospital discharge data. Hospitalizations for acute conditions, such as dehydration or pneumonia, are distinguished from hospitalizations for chronic conditions, such as diabetes or congestive heart failure. Results presented this year apply a modified version 4.1 of the AHRQ Quality Indicators and are not comparable to results from previous years.

A critical caveat should be noted regarding potentially avoidable hospitalizations. Comparatively high rates of potentially avoidable hospitalizations may reflect inefficiency in the health care system. Therefore, groups of patients should not be "blamed" for receiving less efficient care. Instead, examining disparities in efficiency may help make the business case for addressing disparities in care. Investments that reduce disparities in access to high-quality outpatient care may help reduce rates of avoidable hospitalizations among groups that have high rates.

Figure 7.2. Potentially avoidable hospitalization rates, by race/ethnicity and area income, 2001-2008

Figure 7.2. Potentially avoidable hospitalization rates, by race/ethnicity and area income, 2001-2008. For details, go to [D] Text Description below.    Figure 7.2. Potentially avoidable hospitalization rates, by race/ethnicity and area income, 2001-2008. For details, go to [D] Text Description below.

[D] Select for Text Description.

Key: API = Asian or Pacific Islander.
Source: Agency for Healthcare Research and Quality (AHRQ), Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project, State Inpatient Databases disparities analysis file, Nationwide Inpatient Sample, and AHRQ Quality Indicators, modified version 4.1, 2001-2008.
Denominator: Civilian noninstitutionalized adults age 18 and over.
Note: For this measure, lower rates are better. Annual rates are adjusted for age and gender. White, Black, and Asian or Pacific Islander populations are non-Hispanic. Income quartiles are based on median income of ZIP Code of patient's residence

  • From 2001 to 2008, the overall rate of avoidable hospitalizations fell from 1,657 to 1,433 per 100,000 population (data not shown). Declines in avoidable hospitalizations were observed among all racial/ethnic and income groups (Figure 7.2).
  • In all years, rates of potentially avoidable hospitalizations were higher among Blacks compared with Whites and lower among Asians and Pacific Islanders (APIs) compared with Whites. Except in 2001 and 2008, rates were also higher among Hispanics compared with Whites.
  • In all years, rates of potentially avoidable hospitalizations were higher among residents of areas in the lowest and second income quartiles compared with residents of the highest income quartile.
  • In 2008, the top 3 State achievable benchmark for all potentially avoidable hospitalizations was 818 hospitalizations per 100,000.iii The overall achievable benchmark could not be attained for 20 years.
  • The only racial/ethnic group to attain the achievable benchmark as of 2008 was APIs, whereas Whites could not attain the benchmark for about 16 years. Blacks would not attain the benchmark for about 18 years, but Hispanics could attain the benchmark in 7 years.
  • High-income groups would attain the benchmark sooner than lower income groups (lowest quartile, about 41 years; second quartile, 15 years; third quartile, 14 years; and highest quartile, 9 years).

Also, in the NHQR:

  • Declines in avoidable hospitalizations were observed for both acute and chronic conditions.
New! Excess Avoidable Hospitalizations

The following analysis estimates numbers of excess preventable hospitalizations for 2008 by comparing adjusted rates of the AHRQ PQI composite with the benchmark rate. The benchmark rate was set by the States with rates in the top 10%. For excess preventable hospitalizations to be calculated, the difference between a group's rate and the benchmark rate was multiplied by the number of people in the group (for example, for Hispanics, the difference between the Hispanic rate and the benchmark rate was multiplied by the number of Hispanics).

Figure 7.3. Excess number of potentially preventable hospitalizations, by race/ethnicity, 2008

Figure 7.3. Excess number of potentially preventable hospitalizations, by race/ethnicity, 2008. For details, go to [D] Text Description below.

[D] Select for Text Description.

Source: Agency for Healthcare Research and Quality (AHRQ), Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, and AHRQ Quality Indicators, modified version 4.1, 2008.

  • In 2008, if Whites had the benchmark rate of preventable hospitalizations, they would have had almost 710,000 fewer hospitalizations (Figure 7.3). Instead of costing $15.2 billion, preventable hospitalization among Whites would have cost only $9.9 billion, saving $5.3 billion.
  • If Blacks had the benchmark rate of preventable hospitalizations, they would have had more than 470,000 fewer hospitalizations. Instead of costing $5.4 billion, preventable hospitalizations among Blacks would have cost only $1.7 billion, saving $3.7 billion.
  • If Hispanics had the benchmark rate of preventable hospitalizations, they would have had almost 170,000 fewer hospitalizations. Instead of costing $3.7 billion, preventable hospitalizations among Hispanics would have cost only $2.2 billion, saving $1.5 billion.
  • Because the overall rate among APIs was below the benchmark rate, there are no estimated excess preventable hospitalizations for this group.

Comparisons with the 3 State achievable benchmark for the composite rate of preventable hospitalizations in 2008 are also used to estimate excess preventable hospitalizations by area income. Area income refers to the median income of the ZIP Code in which the patient resides.

Figure 7.4. Excess number of potentially preventable hospitalizations, by income, 2008

Figure 7.4. Excess number of potentially preventable hospitalizations, by income, 2008. For details, go to [D] Text Description below.

[D] Select for Text Description.

Source: Agency for Healthcare Research and Quality (AHRQ), Center for Delivery, Organization, and Markets, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, and AHRQ Quality Indicators, modified version 4.1, 2008.

  • In 2008, if residents of the neighborhoods in the lowest income quartile had the benchmark rate of preventable hospitalizations, they would have had more than 630,000 fewer hospitalizations (Figure 7.4). Instead of costing $7.8 billion, preventable hospitalizations among income quartile 1 residents would have cost only $3.3 billion, saving $4.5 billion.
  • If residents of income quartile 2 neighborhoods had the benchmark rate of preventable hospitalizations, they would have had almost 410,000 fewer hospitalizations. Instead of costing $6.7 billion, preventable hospitalizations would cost only $3.7 billion, saving $3.0 billion.
  • If residents of income quartile 3 neighborhoods had the benchmark rate of preventable hospitalizations, they would have had about 240,000 fewer hospitalizations. Instead of costing $5.4 billion, preventable hospitalizations would cost only $3.6 billion, saving $1.8 billion.
  • If residents of the highest income quartile neighborhoods had the benchmark rate of preventable hospitalizations, they would have had about 160,000 fewer hospitalizations. Instead of costing $5.5 billion, preventable hospitalizations would cost only $4.1 billion, saving $1.4 billion.
Potentially Avoidable Hospitalizations Among Medicare Home Health Patients

Many patients are hospitalized while receiving care from home health agencies, with resulting high costs and care transition problems. A number of these hospitalizations are appropriate. However, some hospital admissions could be prevented with better primary care and monitoring in these settings, or the patient could receive appropriate treatment in a less resource-intense setting.

Using the AHRQ PQIs, we track potentially avoidable hospitalizations among Medicare patients occurring within 30 days of the start of home health care. These patients may differ from patients who are predominantly admitted for avoidable conditions from home but are not receiving home health services. Some of these patients are receiving appropriate primary care and others have not visited a health care provider for years.

In contrast, Medicare home health patients have regular contact with health providers, which should reduce rates of avoidable hospitalization. However, these patients are also more acutely ill, may become seriously ill when affected by a new illness, and may have multiple comorbidities. Medicare patients in these settings often have been hospitalized recently. Therefore, an avoidable hospitalization may represent a return to the hospital, perhaps against the expectation that the patient no longer needed acute care.
For application to home health settings, the potentially avoidable stays are identified within a defined time period, 30 days, from the home health admission date. If a patient is hospitalized more than once in that period, only the first stay is recognized for the measure.

Data on home health patients come from Medicare fee-for-service (FFS) home health claims and Outcome and Assessment Information Set patient assessment information. These data are linked with Medicare Part A acute care hospital claims to determine hospitalizations for potentially avoidable conditions.

Figure 7.5. Medicare home health patients with potentially avoidable hospitalizations within 30 days of start of care, by race/ethnicity, 2000-2010

Figure 7.5. Medicare home health patients with potentially avoidable hospitalizations within 30 days of start of care, by race/ethnicity, 2000-2010. For details, go to [D] Text Description below.

[D] Select for Text Description.

Key: AI/AN=American Indian or Alaska Native.
Source: Centers for Medicare & Medicaid Services, Outcome and Assessment Information Set linked with Medicare Part A claims (100%), 2000-2010.
Denominator: Adult nonmaternity patients starting an episode of skilled home health care.
Note: For this measure, lower rates are better. Rates standardized to the 2006 patient population according to Medicare enrollment category. Hispanics could include other races. All race categories could include Hispanics.

  • Between 2000 and 2010, hospitalizations for potentially avoidable conditions within 30 days of home health episode start declined from 5.0% to 3.6% (data not shown).
  • From 2000 to 2010, among all racial and ethnic groups except Asians, the percentage of potentially avoidable hospitalizations within 30 days of home health episode start significantly decreased (Figure 7.5).

Perforated Appendixes

Perforation is a severe complication of appendicitis that allows intestinal contents to spill into the abdominal cavity. Patients with a perforated appendix have a worse prognosis and require longer recovery times after surgery than patients whose appendix does not rupture. More timely detection and treatment of appendicitis can reduce the percentage of appendicitis admissions in which rupture has occurred.

Figure 7.6. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, by race/ethnicity and area income, 2004-2008

Figure 7.6. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, by race/ethnicity and area income, 2004-2008. For details, go to [D] Text Description below.    Figure 7.6. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, by race/ethnicity and area income, 2004-2008. For details, go to [D] Text Description below.

[D] Select for Text Description.

Key: API = Asian or Pacific Islander.
Source: Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project, State Inpatient Databases disparities analysis file, 2004, 2005, 2007, and 2008.
Note: For this measure, lower rates are better. Data for 2006 were not available this year, because a new version of the PQI software was used to calculate rates and 2006 was not included in the calculation.

  • From 2004 to 2008, there were no statistically significant differences between racial/ethnic groups (Figure 7.6).
  • In 2008, the rates of perforated appendixes were higher for the lowest and second income quartiles than for the highest income quartile (301 and 288 per 1,000 appendicitis admissions, respectively, compared with 254).

Nationwide, many American Indians and Alaska Natives (AI/ANs) who are members of a federally recognized Tribe rely on the Indian Health Service (IHS) to provide access to health care in the counties on or near reservations. Because data on AI/ANs obtained from most Federal and State sources are incomplete, the NHDR addresses the data gap for this measure by examining data submitted to the IHS National Patient Information Reporting System by IHS, Tribal, and contract hospitals.

Figure 7.7. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, in IHS, Tribal, and contract hospitals, by age and gender, 2004-2008

Figure 7.7. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, in IHS, Tribal, and contract hospitals, by age and gender, 2004-2008. For details, go to [D] Text Description below.     Figure 7.7. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, in IHS, Tribal, and contract hospitals, by age and gender, 2004-2008. For details, go to [D] Text Description below.

[D] Select for Text Description.

Source: Indian Health Service, National Patient Information Reporting System, National Data Warehouse, Workload and Population Data Mart, 2004-2008.
Note: For this measure, lower rates are better. The total for each year is age adjusted.

  • Between 2004 and 2008, there was no statistically significant change in the overall rate of perforated appendixes at Indian Health Service facilities (Figure 7.7).
  • In 2008, for IHS facilities, the rates of perforated appendixes for those ages 45-64 and age 65 and over were higher than for those ages 18-44 (388 and 656 per 1,000 appendicitis admissions, respectively, compared with 220).

Potentially Harmful Preventive Services With No Benefit

This section highlights waste and opportunities to reduce unnecessary costs. Waste includes overuse, underuse, and misuse of health care services. This section focuses on overuse, while underuse and misuse are addressed in various other sections of this report. Many of the effectiveness measures relate to people not getting services they need, i.e., underuse. Many of the safety measures relate to people getting services in a hazardous manner, i.e., misuse.

An example of overuse that can be reduced through education is PSA screening or a DRE to check for prostate cancer among men age 75 and over. The U.S. Preventive Services Task Force recommended against these tests in 2008 (AHRQ, 2008) and there is continued concern that administration of the PSA test or DRE in men age 75 and over will lead to false positives and subsequent unnecessary treatments. Reductions in costs and improvements in quality should result from reductions in unnecessary PSA screening and DREs.

Figure 7.8. Males age 75 and over who reported having a prostate-specific antigen test or a digital rectal exam within the last 12 months, by race and income, 2004-2010

Figure 7.8. Males age 75 and over who reported having a prostate-specific antigen test or a digital rectal exam within the last 12 months, by race and income, 2004-2010. For details, go to [D] Text Description below.     Figure 7.8. Males age 75 and over who reported having a prostate-specific antigen test or a digital rectal exam within the last 12 months, by race and income, 2004-2010. For details, go to [D] Text Description below.

[D] Select for Text Description.

Key: AI/AN = American Indian/Alaska Native.
Source: Centers for Disease Control and Prevention, Behavioral Risk Factor Surveillance System, 2004-2010.
Denominator: Adult males age 75 and over with no history of prostate cancer.
Note: For this measure, lower rates are better. Data for 2004, 2006, and part of 2008 precede the U.S. Preventive Services Task Force recommendation against screening men age 75 and over. It should be noted that PSA tests and DREs are provided to this population for purposes unrelated to prostate cancer screening. Data to determine the purpose of these services were unavailable and all reported PSA tests and DREs are reflected in the data shown. Data for AI/ANs were statistically unreliable for 2004 and 2006, as were data for Asians for 2004.

  • Between 2004 and 2010, the overall percentage of males age 75 and over who had a PSA test or a DRE within the last 12 months increased from 71% to 74% (data not shown).
  • In all years presented, the percentage of males age 75 and over who had a PSA test or a DRE within the last 12 months was lower for Blacks than for Whites (Figure 7.8).
  • In all years presented, the percentage of males age 75 and over who had a PSA test or a DRE within the last 12 months was lower for the lowest two income groups than for high-income males.
  • In 2008, the top 5 State benchmark for males age 75 and over who had a PSA or DRE exam was 62%.iv There was no evidence of overall movement toward the benchmark, and only poor males had attained the benchmark.

References

Fisher ES, Wennberg DE, Stukel TA, et al. The implications of regional variations in Medicare spending. Part 1: the content, quality, and accessibility of care. Ann Intern Med 2003 Feb 18;138(4):273-87.

Lau DT, Kasper JD, Potter DE, et al. Hospitalization and death associated with potentially inappropriate medication prescriptions among elderly nursing home residents. Arch Intern Med 2005 Jan 10;165(1):68-74.

McGlynn E. Identifying, categorizing, and evaluating health care efficiency measures. Rockville, MD: Agency for Healthcare Research and Quality; 2008. AHRQ Publication No. 08-0030. Available at: http://www.ahrq.gov/qual/efficiency. Accessed December 8, 2009.

Screening for prostate cancer. Rockville, MD: Agency for Healthcare Research and Quality; 2008. Available at: http://www.uspreventiveservicestaskforce.org/uspstf/uspsprca.htm . Accessed August 13, 2009.

Zhan C, Sangl J, Bierman AS, et al. Potentially inappropriate medication use in the community-dwelling elderly: findings from the 1996 Medical Expenditure Panel Survey. JAMA 2001 Dec 12;286(22):2823-9.


i. Available at www.healthcare.gov/center/reports/quality03212011a.html.
ii. Drugs that should always be avoided for older patients include barbiturates, flurazepam, meprobamate, chlorpropamide, meperidine, pentazocine, trimethobenzamide, belladonna alkaloids, dicyclomine, hyoscyamine, and propantheline. Drugs that should often or always be avoided for older patients include carisoprodol, chlorzoxazone, cyclobenzaprine, metaxalone, methocarbamol, amitriptyline, chlordiazepoxide, diazepam, doxepin, indomethacin, dipyridamole, ticlopidine, methyldopa, reserpine, disopyramide, oxybutynin, chlorpheniramine, cyproheptadine, diphenhydramine, hydroxyzine, promethazine, and propoxyphene.
iii. The top 3 States that contributed to the achievable benchmark are Hawaii, Utah, and Washington.
iv. The Top 5 States that contributed to the achievable benchmark are California, Hawaii, Louisiana, New Jersey, and Tennessee.



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Current as of April 2012
Internet Citation: Chapter 7. Efficiency: National Healthcare Disparities Report, 2011. April 2012. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/research/findings/nhqrdr/nhdr11/chap7.html