Minnesota tallies $2 billion in wasted hospital spending

Minnesotans receive as much as $2 billion in hospital care a year that could be avoided, according to a new analysis that also estimates two of every three emergency room visits in the state are potentially preventable.

The first-of-its-kind report, released Wednesday, was an effort by Minnesota health officials to quantify the waste, which amounts to 4.8 percent of state spending on health care per year, and to find the fat in the system that would be easiest to trim. It also appears to contradict the state's reputation for efficient health care.

"After all, no one likes to pay unnecessary health care bills, or make a trip to the hospital that could have been prevented in the first place," said Dr. Ed Ehlinger, commissioner of the Minnesota Department of Health.

State health researchers focused on conditions such as abdominal pains and upper respiratory infections that, studies have shown, often cause preventable ER visits, and conditions such as heart failure or blood infections that often cause recently discharged patients to return to the hospital.

The report estimated that 1.3 million ER visits were preventable in 2012, along with 50,000 initial hospital admissions and 22,000 readmissions for patients who had been recently discharged. The findings were based on a review of the state's unique all-claims payer database, which gave research de-identified access to insurance claims for 4.3 million Minnesotans in 2012.

The problems aren't new. Preventing hospital readmissions, for example, has been a focus of numerous hospitals as well as state and federal health care reforms. Methodist Hospital in St. Louis Park initiated a home visit program, sending firefighters or paramedics to check on recently discharged patients to make sure they are safely settling back in to home life and understand their take-home instructions.

But Ehlinger and state health economist Stefan Gildemeister said this report is distinct because it examines these causes of waste at a level that suggests new solutions. Claims showed that 50,000 people had four or more potentially avoidable ER visits, and Gildemeister said those repeat customers are an obvious target group for insurers and health care providers to support with better access to primary care.

Depression and other mental health disorders were a substantial cause of ER visits and rehospitalizations. And preventable hospital care was generally more common among elderly and low-income patients on state-subsidized health plans.

That matches with the experience of Dr. Bjorn Westgard, an ER physician at Regions Hospital in St. Paul, who noted that social and economic circumstances weigh heavily on low-income patients, who avoid paying for care until a crisis occurs.

"If you're an elderly person on a fixed income and you're thinking about every dollar that you spend, even if you've got Medicare or whatever, you may think twice about going to a clinic appointment," Westgard said. "And suddenly your health goes south and lo and behold you have an emergency."

Ehlinger said it is critical to make people aware of the benefits of their plans, which often provide full coverage for screenings, pneumonia shots and other preventive care that can reduce the chance of needing hospital visits.

Not all of the potentially preventable ER visits involved people ignoring chronic illnesses. Half, according to the claims data, involved people who had no chronic illnesses and were previously healthy.

Among the avoidable hospital admissions, half involved people whose problems could have been treated with more timely access to outpatient services. Nearly 13 percent involved elderly patients with common problems such as urinary tract infections who could have been treated at their nursing homes.

Ehlinger said the new report and cost estimate provides a baseline that the state can use in the future to see if it is making progress and eliminating the amount of preventable care that patients receive.

A limitation of the report is that the data are three years old, and reflect Minnesota health care before state and federal Affordable Care Act reforms, including a health insurance mandate, took effect.

Programs such as post-discharge home visits and preventive crisis services to people with mental illnesses have made a difference since that time and have probably reduced the amount of ER and hospital overuse, said Mary Brainerd, president and chief executive of HealthPartners. The Bloomington-based organization operates a health plan that contributed claims to the analysis.

ER visits for Minnesotans in HealthPartners' public low-income health programs have declined by as much as 25 percent in that time, she said. "I think it is an important challenge to address, but I'm sure the number is different today."

Another limitation of the data is that it does not include the costs of the uninsured or state residents with health coverage through certain federal programs or small out-of-state insurance companies.

Gildemeister said it is unlikely that $2 billion in hospital care could be avoided entirely. And preventing hospital visits requires spending in other areas such as increasing primary care access to patients in low-income areas and at more convenient hours for working families.

Brainerd said helping patients after hospital or doctors visits to understand and take their medications is a key, because they often aren't listening closely to instructions.

"You're leaving the doctor's office," she said, "you get to the car and it's like, 'Oh my gosh, I didn't realize exactly what that meant!' "

Jeremy Olson • 612-673-7744