Patient-centered care may not always lead to reduced spending for Medicare beneficiaries

But engaging patients in decision-making enables treatment that better aligns with their own preferences.

A new national study of U.S. physician practices who treat Medicare beneficiaries with type 2 diabetes and/or cardiovascular disease (CVD), led by UC Berkeley Professor of Health Policy and Management Hector P. Rodriguez and published this month in Health Affairs Scholar, indicates that key stakeholders encouraging the use of patient-engagement strategies should not necessarily expect reduced spending.

Prior to this study, no national evidence had determined the extent to which physician practice adoption of patient-engagement strategies—which include practices like shared decision-making—for adults with diabetes and/or CVD was associated with total spending. The study found that spending at practices that adopted strategies that let patients share decision-making were nonlinear, meaning that as shared decision-making increased, spending did not decrease in lock step.

Types of spending differed between practices that had high or low usage of patient-engagement strategies. Practices that had high usage of such strategies spent more on long-term services and supports (LTSS), such as home health agency, long-term care, skilled nursing facilities, hospice, and home-based services, which reflect the provision of patient-centered care for older adults, according to Rodriguez.

Practices that had low usage of patient-engagement strategies spent more on acute care and testing, which may reflect unnecessary care, duplicative care, or spending that could have been prevented with better patient engagement.

“Rather than reducing spending, supporting patients in making health care decisions that align with their preferences may lead to higher total spending for Medicare beneficiaries due to greater use of LTSS ,” said Rodriguez. “We know that Medicare LTSS are underutilized, while testing and acute care are overutilized. So patient engagement shifts patients to receive patient-centered care, but this comes at a cost (higher total spending). The key message is that shifting to patient-centered care is the right thing to do, but we should not expect immediate cost savings from practice investments to better engage patients in shared decision-making.”

“Our hope is that policymakers and organizational leaders focus on engaging patients in treatment decision-making and behavioral changes because doing so improves patient outcomes, rather than expecting that these strategies will always save money, especially in the short run for vulnerable older adults,” said Rodriguez.

Study co-authors include: Hector P. Rodriguez, Karl Rubio, and Chris Miller-Rosales of UC Berkeley School of Public Health and  Andrew J. Wood of the Dartmouth Institute for Health Policy and Clinical Practice at Dartmouth College.


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