2012 National Healthcare Disparities Report

Chapter 7. Efficiency

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, the Agency for Healthcare Research and Quality (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. This report 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 Improvement 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.
  • Preventable emergency department visits:
    • Potentially avoidable emergency department visit rates.
    • Emergency treatment for mental illness or substance abuse.
    • Emergency treatment for dental conditions.
  • Excess avoidable hospitalizations.
  • Perforated appendixes.

Findings

Inappropriate Medication Use

Some drugs are potentially harmful for older patients but still are prescribed to them (Zhan, et al., 2001).ii Using inappropriate medications can be life threatening and may result in hospitalization, as well as increased costs of pharmaceutical services (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, 2002-2009

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Source: Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey, 2002-2009.
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.

  • In 2009, there were no statistically significant differences between older racial/ethnic groups in the percentage of adults age 65 and over who received potentially inappropriate medications (Figure 7.1).
  • In 2009, the percentage of adults age 65 and over who received potentially inappropriate medications was higher for females than for males (15.4% compared with 10.7%).

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

  • From 2002 to 2009, the overall percentage of adults age 65 and over who received potentially inappropriate medications decreased.

Preventable Hospitalizations

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 for adults, by race/ethnicity and area income, 2001-2009

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Key: API = Asian or Pacific Islander.
Source: Agency for Healthcare Research and Quality (AHRQ), Healthcare Cost and Utilization Project, State Inpatient Databases disparities analysis file, Nationwide Inpatient Sample, and AHRQ Quality Indicators, modified version 4.1, 2001-2009.
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 API are non-Hispanic. Hispanic includes all races. Income quartiles are based on median income of ZIP Code of patient's residence.

  • From 2001 to 2009, the overall rate of avoidable hospitalizations fell from 1,657 to 1,395 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 lower among Asians and Pacific Islanders (APIs) compared with Whites. Rates were higher among Blacks 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.
  • The 2008 top 3 State achievable benchmark for all potentially avoidable hospitalizations was 818 hospitalizations per 100,000.iii Given current trends, the overall achievable benchmark could not be attained for 18 years.
  • The only racial/ethnic group to attain the achievable benchmark as of 2009 was APIs, whereas Whites could not attain the benchmark for 14 years. Blacks would not attain the benchmark for 19 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 38 years; second quartile, 14 years; third quartile, 12 years; and highest quartile, 8 years).

Also, in the NHQR:

  • Declines in avoidable hospitalizations were observed for both acute and chronic conditions.

Preventable Emergency Department Visits

Potentially Avoidable Emergency Department Visit Rates for Adults

Potentially preventable, high-cost encounters with the medical system occur not only in hospitals, but also in emergency departments (EDs). There were more than 125 million ED encounters in 2008 (AHRQ, 2008). ED crowding, boarding (i.e., holding patients until an inpatient bed is available), and ambulance diversion have become more prevalent and have given rise to increasing concerns about the quality of care delivered in EDs.

Some hospitalizations and ED encounters cannot be avoided, but appropriate ambulatory care can help keep some patients from having to visit an ED or from being hospitalized. Reducing potentially avoidable ED encounters, in particular, holds promise for reducing cost, improving quality, and enhancing efficiency.

For this analysis, the AHRQ PQI software was applied to the Healthcare Cost and Utilization Project (HCUP) Nationwide Emergency Department Sample (NEDS). The overall potentially avoidable ED visit rate includes visits for acute conditions such as dehydration and pneumonia and chronic conditions such as diabetes and congestive heart failure.

  Figure 7.3. Potentially avoidable emergency department visit rates, by gender and area income, 2007-2009

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Source: Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project, Nationwide Emergency Department Sample, 2007-2009.
Denominator: Adults age 18 and over.
Note: Annual rates are adjusted for age and gender.

  • In 2009, the rate of ED visits for potentially avoidable conditions was 3,681 per 100,000 adults (Figure 7.3).
  • In all years, women had a higher rate of potentially avoidable ED visits compared with men.
  • In all years, residents of the highest income quartile had a lower rate of potentially avoidable ED visits compared with residents of lower income quartiles.

Also, in the NHQR:

  • In all years, adults ages 45-64 and age 65 and over had higher rates of potentially avoidable ED visits compared with adults ages 18-44.
  • In all years, residents of small metropolitan, micropolitan, and noncore areas had higher potentially avoidable ED visit rates compared with residents of large metropolitan areas.

Emergency Treatment for Mental Illness or Substance Abuse

When high-quality mental health care is not available in the community, patients with mental illness tend to rely on emergency rooms for care (Alakeson, et al., 2010). EDs are often not staffed or equipped to provide optimal psychiatric care, and patients with mental illness often wait long periods before receiving appropriate care. ED staff observing patients waiting for psychiatric care cannot care for patients with other medical emergencies. This measure provides information on the quality of the local mental health care system and the degree to which EDs function as safety net providers for people with mental health and substance abuse problems.

  Figure 7.4. Rate of emergency department visits with a principal diagnosis related to mental health and alcohol or substance abuse, per 100,000 population, by gender and area income, 2009

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Source: Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project, Nationwide Emergency Department Sample, 2009.
Denominator: U.S. population.
Note: For this measure, lower rates are better. Substance abuse includes visits for co-occurring substance abuse and mental health disorders.

  • In 2009, the rate of ED visits for mental health was 1,170 per 100,000 population, and the rate of ED visits for substance abuse (including co-occurring substance abuse and mental health disorders) was 518 per 100,000 population (Figure 7.4).
  • Females had higher rates of ED visits for mental health but lower rates of ED visits for substance abuse compared with males.
  • Residents of the highest income quartile had lower rates of ED visits both for mental health and for substance abuse compared with residents of lower income quartiles.

Also, in the NHQR:

  • Children ages 0-17 and adults age 65 and over had lower rates of ED visits for mental health and for substance abuse compared with adults ages 18-44.
  • Residents of large central metropolitan, medium metropolitan, small metropolitan, micropolitan, and noncore areas had higher rates of ED visits for mental health compared with residents of large fringe metropolitan areas (suburbs). Residents of large central and medium metropolitan areas also had higher rates of ED visits for substance abuse compared with residents of large fringe metropolitan areas.

Emergency Treatment for Dental Conditions

Dental health requires periodic oral exams and timely treatment of tooth decay and gum disease. When patients do not access outpatient dental services, dental disease may progress and necessitate emergent treatment and even hospitalization. EDs often cannot provide definitive dental treatment and can only provide medication for pain and infection. Hence, use of EDs for dental conditions may reflect system inefficiency in the delivery of dental care.

  Figure 7.5. Rate of emergency department visits with a principal diagnosis related to dental issues, per 100,000 population, by gender and area income, 2009

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Source: Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project, Nationwide Emergency Department Sample, 2009.
Denominator : U.S. population.
Note: For this measure, lower rates are better.

  • In 2009, the rate of ED visits for dental conditions was 307 per 100,000 population (Figure 7.5).
  • Males and females had similar rates of ED visits for dental conditions.
  • Residents of the highest income quartile had lower rates of ED visits for dental conditions compared with residents of lower income quartiles.

Also, in the NHQR:

  • Children ages 0-17 and adults age 45 and over had lower rates of ED visits for dental conditions compared with adults ages 18-44.
  • Residents of small metropolitan, micropolitan, and noncore areas had higher rates of ED visits for dental conditions compared with residents of large metropolitan areas.

Excess Avoidable Hospitalizations

The following analysis estimates numbers of excess preventable hospitalizations for 2009 by comparing adjusted rates of the AHRQ PQI composite with the 2009 top 4 State achievable benchmark rate of 814 hospitalizations per 100,000 population. 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 7.6. Excess number of potentially preventable hospitalizations, by race/ethnicity, 2009

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Source: Agency for Healthcare Research and Quality (AHRQ), Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, and AHRQ Quality Indicators, modified version 4.1, 2009.

  • In 2009, if Whites had the benchmark rate of preventable hospitalizations, they would have had almost 650,000 fewer hospitalizations (Figure 7.6). Instead of costing $14.8 billion, preventable hospitalization among Whites would have cost only $9.9 billion, saving $4.9 billion.
  • If Blacks had the benchmark rate of preventable hospitalizations, they would have had almost 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 190,000 fewer hospitalizations. Instead of costing $3.8 billion, preventable hospitalizations among Hispanics would have cost only $2.2 billion, saving $1.6 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 top 4 State achievable benchmark for the composite rate of preventable hospitalizations in 2009 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 7.7. Excess number of potentially preventable hospitalizations, by income, 2009

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Source: Agency for Healthcare Research and Quality (AHRQ), Healthcare Cost and Utilization Project, Nationwide Inpatient Sample, and AHRQ Quality Indicators, modified version 4.1, 2009.

  • In 2009, if residents of the neighborhoods in the lowest income quartile had the benchmark rate of preventable hospitalizations, they would have had more than 640,000 fewer hospitalizations (Figure 7.7). Instead of costing $7.9 billion, preventable hospitalizations among income quartile 1 residents would have cost only $3.3 billion, saving $4.6 billion.
  • If residents of income quartile 2 neighborhoods had the benchmark rate of preventable hospitalizations, they would have had almost 370,000 fewer hospitalizations. Instead of costing $6.3 billion, preventable hospitalizations would cost only $3.6 billion, saving $2.7 billion.
  • If residents of income quartile 3 neighborhoods had the benchmark rate of preventable hospitalizations, they would have had about 230,000 fewer hospitalizations. Instead of costing $5.5 billion, preventable hospitalizations would cost only $3.7 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 140,000 fewer hospitalizations. Instead of costing $5.1 billion, preventable hospitalizations would cost only $4.0 billion, saving $1.1 billion.

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 7.8. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, by race/ethnicity and area income, 2004-2009

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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, and 2007-2009.
Note: For this measure, lower rates are better. White, Black, and API are non-Hispanic. Hispanic includes all races. Data for 2006 are not included, because a new version of the PQI software was used to calculate rates and 2006 was not included in the calculation.

  • From 2004 to 2009, there were no statistically significant differences between racial/ethnic groups or income groups in the rate of perforated appendixes (Figure 7.8).

Also, in the NHQR:

  • In 2009, the rate of perforated appendixes was higher for those age 65 and over and those ages 45-64 than for those ages 18-44.

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 7.9. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, in IHS, Tribal, and contract hospitals, by age and gender, 2003-2010

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Source: Indian Health Service, National Patient Information Reporting System, National Data Warehouse, Workload and Population Data Mart, 2003-2010.
Note: For this measure, lower rates are better. The total for each year is age adjusted.

  • In 2010, 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 (424.6 and 457.1 per 1,000 appendicitis admissions, respectively, compared with 208.9; Figure 7.9).
  • Also in 2010, for IHS facilities, the rates of perforated appendixes for males was higher than for females (315.6 per 1,000 appendicitis admissions compared with 250.0).

References

Agency for Healthcare Research and Quality. Weighted national estimates from HCUP Nationwide Emergency Department Sample. Rockville, MD: AHRQ; 2008. Available at: http://hcupnet.ahrq.gov.

Alakeson V, Pande N, Ludwig M. A plan to reduce emergency room "boarding" of psychiatric patients. Health Aff (Millwood) 2010 Sep;29(9):1637-42.

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/research/findings/final-reports/efficiency/index.html. Accessed March 13, 2013.

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 http://www.ahrq.gov/workingforquality/nqs/nqs2011annlrpt.htm.
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.

Current as of May 2013
Internet Citation: 2012 National Healthcare Disparities Report: Chapter 7. Efficiency. May 2013. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/research/findings/nhqrdr/nhdr12/chap7.html