Newtown, CT – March 21, 2014
There's another tail that tells a very different tale than last week's. It's the PAC tail. PACs are Potentially Avoidable Complications, something about which we've published a lot and that causes significant variations in costs of care. By definition, these are avoidable events that include patient safety failures, hospitalizations and ED visits for ambulatory care sensitive conditions, as well as acute events like heart attacks. Ever since we introduced the concepts of PACs close to a decade ago, we've shown that providers who deliver higher quality care can have lower episode costs (as long as they're not price-gouging). Recently, as we've expanded the number of episodes in our analyses, and started looking at the total costs of all episodes, a new tail in the distribution has emerged…the PAC tail, which is represented in the graph below.
What this means to you – Each circle on this chart represents a plan member, and the individual is plotted on two axes: the Y axis represents the total costs incurred across all episodes that can be classified as "typical" or routine. The X axis represents the total costs associated to potentially avoidable complications, and the size of the circle is the proportion of total costs absorbed by avoidable complications. So here's the upshot: the high cost patients are the ones with PACs, and that's what's driving excess and unwarranted variation. Reducing avoidable complications will reduce the variability and overall costs of care while increasing quality. It's pretty simple when you stop and think about it, and a tale worth telling.