Medical insurance companies spend less than 1% of your premium on improving the quality of care you receive

Part of Obama Care requires that medical insurance companies use at least 80% of the premium they charge you to pay for your medical care and for quality improvement expenses. If they don't, they have to refund you the difference.  This requirement means that the government has to collect data from medical insurance companies so that the companies can prove they spent your premium for your care and to improve the quality of your care.  This data is freely available to anyone who wants to evaluate it.

Mark Hall and Michael McCue did just that and they present their analysis in a Commonwealth Fund Issue Brief. The data for the analysis came from those medical loss ratio (MLR) forms filed with Centers for Medicare and Medicaid Services (CMS)  for the year 2011 and the authors limited their analysis to insurers with enrollment of 1,000 or more people. 

The authors share some interesting summary statistics from other CMS reports including a list of insurance companies owing rebates, and a nice summary of average rebate by state. Collectively, insurers had to pay out over 1 billion dollars in rebates for the 2011 year, reducing administrative expenses and profit margins by that amount.

But one of the authors' most interesting findings is how the insurance companies spend your premium. They present this data in a pie chart. I recommend you take a look at Exhibit 1 in their report. I've also put that data into a bar graph. Can you find the expenditure on quality improvement? Click on the graph to see the full image.

Created from data provided in Exhibit 1 of Commonwealth Fund pub 1671, Vol 14, 2013

The authors report that insurers spent $29.04 per person on quality improvement.   Quality improvement includes such things as health information technology expenses ($4.88 per person) as well as improving outcomes ($14.92 per person), reducing hospital readmissions ($2.55 per person) , patient safety ($2.94) and wellness activities ($3.74).

This is the first year such data is available. It will be interesting to monitor to see if medical insurers choose to invest in improving the quality of the care they purchase for you.

Did you reduce avoidable readmissions in time to avoid the CMS penalty?

CMS Hospital Readmission Reduction Program starts today.
By now your hospital has carefully reviewed its own data and is using that data to identify the clinical conditions that you need to address to reduce potentially avoidable readmissions.  You've implemented some changes in your practices and are evaluating the effectiveness of those changes. If you are seeing consistent reductions in readmissions - bravo. If not, TheEvidenceDoc would like to help you with some tips and resources to help you identify practices that might be successful in your setting, by focusing on evidence based best practices.

What are evidence based practices? We'll define them as interventions for which there is consistent, scientific evidence showing improvement in the quality of care delivered to patients and leading to better patient outcomes.  And we'll call them practices that are demonstrated to be safe and effective.

There are several ways and places to look for evidence of safe and effective practices. In this post, we will consider research validated evidence and will demonstrate a free, widely available resource for locating research validated evidence.  TheEvidenceDoc -along with others like the Institute of Medicine (IOM), Agency for Healthcare Research and Quality (AHRQ) and the Cochrane Collaboration - recommends you use evidence derived from systematic review of research.  This systematic search for and retrieval of all the relevant research produces the best results for unbiased answers to what works.  And so we'll start by searching for systematic reviews.

One of the best search engines for accessing the published research is PubMed. PubMed is a service of the US National Library of Medicine that searches the MEDLINE database.  And even better, it includes a pre-built, relatively consistent and reliable search strategy for finding systematic reviews.

Screen shot of PubMed - You can find Clinical Queries search function under PubMed Tools

Screen shot of PubMed - You can find Clinical Queries search function under PubMed Tools

There are several phrases you could enter in the search box after clicking on Clinical Queries. If you enter the CMS phrase, potentially avoidable hospitalizations, you'll retrieve nine results in the category labeled systematic reviews.

PubMed Clinical Queries search for potentially avoidable readmissions

PubMed Clinical Queries search for potentially avoidable readmissions

Or you could enter phrases specific to the condition of interest for reducing readmissions. So you might search -  heart failure readmissions.

Not everything retrieved will be a systematic review. Or relevant to your setting. Or even of good quality. 

We'll provide more in-service training on those topics in another post.

But for now - happy hunting...TheEvidenceDoc