This Health of America Report analyzed three years of independent Blue Cross and Blue Shield (BCBS) companies’ claims data for angioplasties.

July 16, 2015

The Blue Cross Blue Shield Association is an association of 36 independent, locally operated Blue Cross and/or Blue Shield companies.

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Cost Variations in Cardiac Care: Overview

Cardiovascular disease is a leading cause of death and disability in the United States, responsible for 610,000 deaths — 1 in 4 — every year. Though much of heart disease is preventable by adopting healthier behaviors, and significant progress has been made in reducing deaths in recent years, millions of Americans continue to need cardiac treatment and procedures. The cost of this care is expected to reach $918 billion by 2030 — an increase of almost 200 percent from 2010.

One of the most common procedures used in the treatment of heart disease is percutaneous coronary intervention (PCI) or angioplasty with and without stents. First developed in 1977, and in wide use since the 1990s, approximately one million angioplasties are performed annually in the U.S. — making them a top ten contributor to healthcare costs, with expenditures totaling $10 billion in 2014. In addition, according to the Journal of the American Medical Association, 1 out of 8 of these procedures is medically unnecessary and inappropriate.1

This Health of America Report analyzed three years of independent Blue Cross and Blue Shield (BCBS) companies’ claims data for angioplasties.2

The report examined angioplasties performed among patients who were not experiencing a heart attack, in both inpatient and outpatient facilities, across 86 of the 100 largest Metropolitan Statistical Areas (MSAs) where data were available. The findings reveal that even after adjusting for geographic differences in business costs, angioplasty episode costs vary widely both within and across MSAs.

Variations in cost within a market are significant, varying by as much as 532 percent. While the phenomenon of cost variation in healthcare is well-known and high costs are the result of many factors — including an aging population, new treatments, and technologies — data reveal that in markets with a high degree of cost variation, a significant volume of episodes occur at higher cost facilities.

Further analysis indicates that there are other facilities in these same markets that deliver quality outcomes at a lower cost.

These findings reinforce the importance of competition within a market and the need to provide consumers with effective tools to help them make informed decisions about their care.

Many angioplasties nationally are performed while a patient is suffering a heart attack. This analysis focuses solely on those procedures performed under less urgent conditions, making it possible for consumers to consider both cost and quality in choosing the best facility for their care. Cost and quality information are included in many transparency tools to inform consumers on where to seek high-quality, affordable care.

Variation in cost across markets is also significant and can vary by as much as 295 percent. This continues to concern national employers seeking solutions that help their employees in choosing quality settings for their care, while reducing overall costs.

This is the second report by Blue Cross Blue Shield, The Health of America Report, a collaboration between the Blue Cross Blue Shield Association and Blue Health Intelligence, which uses a market-leading claims database to uncover key trends and provide insight into healthcare affordability and access to care. These insights also point to where Blue Cross and Blue Shield (BCBS) innovations can address pressing market issues.

Cost Variation in Cardiac Care: Variation Within Markets

Of the top MSAs across the country that were evaluated for this report, nearly half have episode cost variations greater than 100 percent. Figure 1 below highlights cost variation within markets with 13 MSAs showing significant variation (>200 percent).

Figure 1: Map of cost variation within markets for PCI episodes across MSAs

Map of cost variation within markets for PCI episodes across MSAs


Figure 2 below highlights the top five MSAs with the highest variation in episode costs and the five MSAs with the lowest variation of episode costs within each market. Variation can be as high as 532 percent in Los Angeles-Long Beach, California, and as low as 13 percent in Ventura, California.

Figure 2: Top markets with high and low cost variation within an MSA for PCI episodes

Top markets with high and low cost variations


Interestingly, in the top five high variation markets, the findings showed that high cost facilities (that is, those with median episode costs that are at least 20 percent above the median within each MSA) have a significant portion of the total episodes performed at high cost facilities (see Figure 3 below).

It is important to note that in each of these markets, alternative facilities are, at present, delivering high-quality care1 at lower episode costs. For example, in the five MSAs identified below, 16 facilities deliver high-quality care at lower episode costs. Having these options highlights the importance of competition within a market and equipping consumers with information and transparency tools to make informed decisions on where to seek care.

Figure 3: Table of Top 5 High Variation MSAs and Level of Concentration in High Cost Facilities

Percentage episode cost variation


When looking at the number of facilities in the top five highest variation markets, the number of facilities ranged from six to 33 within a market. While overall, more facilities can lead to higher variation, in the five highest variation markets, the number of facilities varied considerably. It is acknowledged that greater cost variability within markets tend to exist where there are more facilities.3 The underlining factors which contribute to cost variation in larger MSAs are beyond the scope of this report.

Cost Variation in Cardiac Care: Variation Across Markets

The findings confirm the widely known healthcare industry trend that significant cost variation exists across the country. Of the MSAs evaluated for this report, approximately one-third have median episode costs at least 20 percent above the median of $27,144. Figure 4 below highlights variation across all markets relative to the national median cost.

Figure 4: Map of median costs across markets for PCI episodes across MSAs

Map of median costs across markets for PCI episodes across MSAs


Figure 5 below shows the top five MSAs with the highest median episode costs and the five MSAs with the lowest median episode costs. Episode costs can be as little as $15,494 in Birmingham, Alabama, or as much as $61,231 in Sacramento, California.

Figure 5: Top markets with high and low median costs for PCI episodes

Top markets with high and low median costs for PCI episodes

 

Conclusion

The Health of America Report analyzed cost variation in 86 of the 100 largest MSAs across the country and found wide disparity in the median cost per episode for angioplasty procedures performed on patients who were not experiencing a heart attack. The report examines episodes among patients whose procedures were performed under less urgent circumstances. The analysis found significant cost variation both within and across markets even after adjustments were made to reflect geographic differences in business costs. Understanding the reasons for this variation, resulting outcomes for patients, and the impacts on the healthcare system as a whole is a critical next step. The goal is to influence positive change in the market to improve clinical quality, lower healthcare costs, and increase patient satisfaction associated with PCI as a treatment for cardiovascular disease.

Blue Cross and Blue Shield companies recognize the importance of provider selection when members are faced with seeking cardiac care. To that end, BCBS companies have designated healthcare facilities as Blue Distinction® in the majority of states across the U.S. Blue Distinction® Centers and Blue Distinction® Centers+ for cardiac care provide a full range of cardiac care services including inpatient cardiac care, cardiac rehabilitation, cardiac catheterization, and cardiac surgery (including coronary artery bypass graft surgery).

To earn the Blue Distinction designation, hospitals must demonstrate better quality and improved outcomes for patients by lowering rates of complications following certain cardiac procedures and lowering rates of healthcare-associated infections compared with their peers. Blue Distinction Centers+ are also 20 percent more cost-efficient than non-designated hospitals for those same cardiac procedures. In fact, Blue Distinction Centers+ can generate savings greater than 40 percent in certain markets.

As part of its evaluation of treatment for heart disease more broadly, The Health of America Report, using BCBS data, will also be focusing on identifying current trends and treatments for women as well as other topics on the treatment of cardiovascular disease.

Appendix A - Cost Variation and Median Costs

COST VARIATION WITHIN AN MSA AND MEDIAN EPISODE COST FOR PCI EPISODES WITHOUT A HEART ATTACK

 

COST VARIATION WITHIN AN MSA AND MEDIAN EPISODE COST FOR PCI EPISODES WITHOUT A HEART ATTACK