MFH Report Suggests Options to Decrease Health Care Spending

Improved Pallative Care Could Save Missouri $4.3 Billion Over 10 Years

KANSAS CITY, Mo. — Avoiding costly end-of-life treatments over the next decade could reduce Missouri health care spending by billions of dollars, according to a new report from the Missouri Foundation for Health.

That recommendation is one of six suggestions included in the report, “Bending the Health Care Cost Curve in Missouri: Options for Saving Money and Improving Care” (

“While government would realize much of the savings,” the report’s authors concluded, “in many cases, they would also extend to private employers and households.”

According to the report, shared decision making in palliative care is the way state government could reduce costs the most on its own without consent from the federal government or any other actors in the health care system. The projected savings would be $4.3 billion over 10 years.

The General Assembly could mandate that all hospitals implement palliative care programs. New York is taking that step this year, the report said.

The palliative care findings were the biggest surprise in the report for Ryan Barker, director of health policy for the Missouri Foundation for Health.

According to the report, 73 percent of hospitals in the state already have palliative care programs.

“I thought it was going to be much lower,” Barker said.

Without interventions, the report projects that annual health care spending in Missouri will nearly double by 2021, from the current $49.0 billion to 90.3 billion. The calculation includes total spending from all payers along with administrative costs.

The report does not estimate the total amount the Missouri health care system could save by implementing all six of its recommendations, since overlapping populations in some of the categories could count some savings more than once.

The other five policy scenarios and the maximum amount they could save during the next decade were:

  • Establishing “medical homes” for patients to coordinate patient care among various providers: $11.9 billion
  • Implementing managed care for “dual eligibles” (low-income elderly and individuals with disabilities who qualify for Medicaid and Medicare): $4.8 billion
  • Enabling a robust health insurance exchange where the state takes an active role in selecting carriers on the basis of price and quality: $3.3 billion
  • Adopting bundled payment methods as opposed to the current system of paying separately for each medical service: $1.9 billion
  • Broadening the scope of practice for physician assistants and nurse practitioners: $1.6 billion

In many cases, according to the report, the “actionable savings” would be significantly lower than the “potential savings.” That’s because state policymakers have limited ability in many areas to force changes on the health care industry.

For instance, the projected savings from implementing mandatory medical homes drops by nearly 75 percent, or $8.7 billion, when taking into account the steps state government can take on its own. The only direct control the state has in that area is through Medicaid and through plans covering state workers, according to the report.

Medicare is a purely federal program not subject to state control, the report said, and the federal Employee Retirement Income Security Act regulates the roughly 40 percent of private coverage that employers provide through self-funded plans.

Given that range of possible savings, it’s up to all the players in the health care system to decide what might work best in Missouri, said Susan Hinck, an analyst for the Missouri Health Advocacy Alliance who served on an advisory panel for the report.

“Other states have shown what works for them,” she said, “and we need to look at solutions that just work for our populations and our providers and what direction Missouri wants go on some of these initiatives.”

The report is in line with the federal Affordable Care Act passed two years ago, said Arif Ahmed, an assistant professor of health administration at the University of Missouri-Kansas City.

Those who wrote the law tried to take into account the varying political attitudes and needs within each state, he said.

“I think that is where the vagueness, if you will, of ACA was intentional,” he said.

But the recommendations in the report are “pretty universally on the short list of almost every state,” said former Kansas Medicaid Director Barb Langner, who is now assistant vice chancellor for health policy at the University of Kansas Medical Center.

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