New Research Shows More Work is Needed to Shift Health Care Spending from Low-Value to High-Value Care

June 20, 2019

Health care policymakers and state officials have been talking about transitioning health care spending from low-value to high-value care for a long time now. But have we made any headway? New research from the Research Consortium on Health Care Value Assessment,* a collaboration between Altarum and VBID Health, finds that very little progress has been made, despite the attention and resources being devoted to the issue.

Using commercial insurance claims data, Altarum researchers examined the prevalence and cost of five low-value health care services and five high-value health care services to better understand trends in health care spending. The analysis found that the spending growth on the five frequently-cited, low-value services remained mostly flat (slower than the growth in total health care spending). Meanwhile, spending on the high-value services increased only moderately, with spending on three of the analyzed services (healthy behaviors counseling, HIV ART, and flu shots) growing faster than total health care spending. Though this is moving in the right direction, there is much more work to be done.

This research, while not a comprehensive characterization of low- and high-value care, establishes a baseline for future and enhanced analysis, as well as highlights the continued need for interventions to reduce use of, and spending on, low-value services. We know from literature and other research that over-utilization of low-value services is also a big problem in the Medicaid and Medicare populations. Thus, expanding this research is key to finding more specific ways (and specific low-value services that are being overly utilized) to advance Medicaid and Medicare value and improve the quality of care for these beneficiaries. Corey Rhyan, our lead researcher on this project, presented our findings at the Academy Health Annual Research Meeting earlier this month.

When asked about the key takeaways from this analysis, Beth Beaudin-Seiler, senior analyst at Altarum who contributed to this research, says, “We were not expecting to see a dramatic drop in low-value care, as it’s hard to change behavior. At the same time, these five measures we analyzed are low-hanging fruit, and have been discussed frequently over the last five years in terms of how we reduce low-value care. While some progress has been made in reducing use in these areas, our findings indicate that there is ample opportunity for providers to go further.”

Read the full report, The "Top 5" Low- and High-Value Services: Trends in Health Care Spending Among the Privately Insured, 2014-2016.

*This work is funded by PhRMA Foundation.

Altarum is a nonprofit organization that works with federal and state agencies and foundations to design and implement solutions to improve the health of individuals with fewer financial resources and populations disenfranchised by the health care system. We achieve measurable results by combining our expertise in public health and health care delivery with technology, workforce training and continuing education, applied research, and technical assistance. Our innovative solutions lead to better health for beneficiaries and better value for payers.