Low-Cost, High-Volume Health Services Contribute The Most To Unnecessary Health Spending

Abstract

An analysis of data for 2014 about forty-four low-value health services in the Virginia All Payer Claims Database revealed more than $586 million in unnecessary costs. Among these low-value services, those that were low and very low cost ($538 or less per service) were delivered far more frequently than services that were high and very high cost ($539 or more). The combined costs of the former group were nearly twice those of the latter (65 percent versus 35 percent).

Keywords: Cost of Health Care; Evidence-Based Medicine; Health Spending; Organization and Delivery of Care; Quality Of Care.

EXHIBIT 1. Use and cost of low-value services in Virginia in 2014, by quartiles of cost

SOURCE Authors’ analysis of data for 2014 from the Virginia All Payer Claims Database. NOTES “Low-value services” refers to forty-four specific health services in specific clinical settings from which the patient is expected to receive no net benefit. The costs for the quartiles of low-value services are less than $100 per very-low-cost service, $100–$538 per low-cost service, $539–$1,315 per high-cost service, and more than $1,315 per very-high-cost service. Costs are the average (mean) amount of money per service paid to a health care provider across all payers, including patients’ out-of-pocket spending, multiplied by the frequency of that service.