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National Healthcare Disparities Report, 2013

Chapter 8. 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 (IOM, 2013). Improving efficiency in the Nation's health care system is an important component of Department of Health and Human Services 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 layoutii:

  • Preventable hospitalizations:
    • Potentially avoidable hospitalization rates.
    • Excess avoidable hospitalizations.
  • Preventable emergency department visits:
    • Emergency treatment for mental illness or substance abuse.
  • Perforated appendixes.

Findings

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 8.1. Potentially avoidable hospitalization rates, by race/ethnicity and area income, 2001-2010

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Key: API = Asian or Pacific Islander.
Source: Agency for Healthcare Research and Quality (AHRQ), Healthcare Cost and Utilization Project, Nationwide Inpatient Sample and State Inpatient Databases disparities analysis file, and AHRQ Quality Indicators, modified version 4.1, 2001-2010.
Denominator: U.S. resident population, 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. Income quartiles are based on median income of ZIP Code of patient's residence.
2008 Achievable Benchmark: 818

  • From 2001 to 2010, the overall rate of avoidable hospitalizations fell from 1,635 to 1,313 per 100,000 population. Declines in avoidable hospitalizations were observed among all racial/ethnic and income groups (Figure 8.1).
  • In all years, rates of potentially avoidable hospitalizations were higher among Blacks than Whites and lower among Asians and Pacific Islanders (APIs) than Whites. Except in 2001 and 2008, rates were also higher among Hispanics than 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 population.iii The overall achievable benchmark could not be attained for 14 years.
  • The only racial/ethnic group to attain the achievable benchmark as of 2010 was APIs, whereas Whites could not attain the benchmark for 11 years. Blacks would not attain the benchmark for 20 years, but Hispanics could attain the benchmark in 8 years.
  • High-income groups would attain the benchmark sooner than lower income groups (lowest quartile, about 31 years; second quartile, 11 years; third quartile, 11 years; and highest quartile, 4 years).

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.

Excess Avoidable Hospitalizations

The following analysis estimates numbers of excess preventable hospitalizations for 2010 by comparing adjusted rates of the AHRQ PQI composite with the 2010 top 4 State achievable benchmark rate of 786 hospitalizations per 100,000 population. Overall, there were 1,823,430 preventable hospitalizations expected at best rate and 1,271,601 excess hospitalizations.

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 8.2. Excess number of potentially preventable hospitalizations, by race/ethnicity, 2010

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Source: Agency for Healthcare Research and Quality (AHRQ), Healthcare Cost and Utilization Project, HCUP State Inpatient Databases disparities analysis file, and AHRQ Quality Indicators, modified version 4.1, 2010.

  • In 2010, if Whites had the benchmark rate of preventable hospitalizations, they would have had about 590,000 fewer hospitalizations (Figure 8.2). Instead of costing $15.1 billion, preventable hospitalizations among Whites would have cost $10.3 billion, saving $4.8 billion.
  • If Blacks had the benchmark rate of preventable hospitalizations, they would have had about 470,000 fewer hospitalizations. Instead of costing $5.6 billion, preventable hospitalizations among Blacks would have cost $1.7 billion, saving $3.9 billion.
  • If Hispanics had the benchmark rate of preventable hospitalizations, they would have had about 215,000 fewer hospitalizations. Instead of costing $4.3 billion, preventable hospitalizations among Hispanics would have cost $2.3 billion, saving $2.0 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 benchmarkiv for the composite rate of preventable hospitalizations in 2010 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 8.3. Excess number of potentially preventable hospitalizations, by income, 2010

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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, 2010.

  • In 2010, if residents of the neighborhoods in the lowest income quartile had the benchmark rate of preventable hospitalizations, they would have had about 620,000 fewer hospitalizations (Figure 8.3). Instead of costing $8.5 billion, preventable hospitalizations among income quartile 1 residents would have cost $3.6 billion, saving $4.9 billion.
  • If residents of income quartile 2 neighborhoods had the benchmark rate of preventable hospitalizations, they would have had about 315,000 fewer hospitalizations. Instead of costing $6.0 billion, preventable hospitalizations would have cost $3.5 billion, saving $2.5 billion.
  • If residents of income quartile 3 neighborhoods had the benchmark rate of preventable hospitalizations, they would have had 225,000 fewer hospitalizations. Instead of costing $5.9 billion, preventable hospitalizations would have cost $3.9 billion, saving $2.0 billion.
  • If residents of the highest income quartile neighborhoods had the benchmark rate of preventable hospitalizations, they would have had about 100,000 fewer hospitalizations. Instead of costing $5.1 billion, preventable hospitalizations would have cost $4.2 billion, saving $0.9 billion.

Preventable Emergency Department Visits

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 departments (EDs) for care (Alakeson, et al., 20108). 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 efficiently care for patients with other medical emergencies. This growing problem reflects a need for greater collaboration among hospital emergency departments and community mental health providers in the delivery of care to individuals who present to emergency departments and are also in need of mental health services.

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 8.4. Rate of emergency department visits with a principal diagnosis related to mental health and alcohol or substance abuse, per 100,000 population, by sex and area income, 2010

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Source: Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project, Nationwide Emergency Department Sample, 2010.
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 2010, the rate of ED visits for mental health was 1,197 per 100,000 population, and the rate of ED visits for substance abuse (including co-occurring substance abuse and mental health disorders) was 510 per 100,000 population (Figure 8.4).
  • Compared with males, females had a higher rate of ED visits for mental health but a lower rate of ED visits for substance abuse.
  • Residents of the highest income quartile had the lowest rate of ED visits for mental health. For substance abuse, residents of the highest income quartile had a lower rate than residents of the first and second quartiles.

Also, in the NHQR:

  • Children ages 0-17 had the lowest rate of ED visits for mental health compared with adults of all age groups, except for adults ages 65-84 (the difference was not statistically significant). Children ages 0-17 had the lowest rate compared with all other age groups for substance abuse.
  • Residents of medium metropolitan and micropolitan areas had higher rates of ED visits for mental health compared with residents of large fringe metropolitan areas (suburbs). Residents of large central metropolitan areas had higher rates of ED visits for substance abuse compared with residents of large fringe metropolitan areas.

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 8.5. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, by race/ethnicity and area income, 2004-2010

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Key: API = Asian or Pacific Islander.
Source: Agency for Healthcare Research and Quality, Healthcare Cost and Utilization Project, Nationwide Inpatient Sample and State Inpatient Databases disparities analysis file, 2004-2010.
Note: For this measure, lower rates are better. White, Black, and API are non-Hispanic. Hispanic includes all races.

  • From 2004 to 2010, there were no statistically significant differences between racial/ethnic groups or income groups in the rate of perforated appendixes (Figure 8.5).

Also, in the NHQR:

  • In 2010, 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 8.6. Perforated appendixes per 1,000 admissions for appendicitis, age 18 and over, in IHS, Tribal, and contract hospitals, by age and sex, 2003-2011

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Source: Indian Health Service, National Patient Information Reporting System, National Data Warehouse, Workload and Population Data Mart, 2003-2011.
Note: For this measure, lower rates are better. The total for each year is age adjusted.

  • In 2011, 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 (361.0 and 555.6 per 1,000 appendicitis admissions, respectively, compared with 204.8; Figure 8.6).
  • Also in 2011, for IHS facilities, the rate of perforated appendixes for males was higher than for females (314.5 per 1,000 appendicitis admissions compared with 228.1). This is similar to national trends. Males are more likely to delay treatment, resulting in higher hospitalization rates.

References

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.

Institute of Medicine. Interim report of the Committee on Geographic Variation in Health Care Spending and Promotion of High-Value Care: preliminary committee observations. Washington, DC: National Academies Press; 2013. Available at: http://iom.edu/Reports/2013/Geographic-Variation-in-Health-Care-Spending-and-Promotion-of-High-Care-Value-Interim-Report.aspx. Accessed September 13, 2013.

McGlynn E. Identifying, categorizing, and evaluating health care efficiency measures. Rockville, MD: Agency for Healthcare Research and Quality; 2008. AHRQ Publication No. 08-0030. 


i Available at https://www.ahrq.gov/workingforquality/nqs/nqs2011annlrpt.htm.
ii Inappropriate medications measure is now in Chapter 4, Patient Safety.
iii The top 3 States that contributed to the achievable benchmark are Hawaii, Utah, and Washington.
iv The top 4 State achievable benchmark is an average of the following States' estimates: Colorado, Oregon, Utah, and Washington.


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Page last reviewed May 2014
Page originally created May 2014
Internet Citation: Chapter 8. Efficiency. Content last reviewed May 2014. Agency for Healthcare Research and Quality, Rockville, MD. https://archive.ahrq.gov/research/findings/nhqrdr/nhdr13/chap8.html

 

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