Chuck Vega, MD, on the Financial Implications of Various Treatments for CABP

In this podcast, Chuck Vega, MD speaks about the financial implications of various treatments for patients with community-acquired bacterial pneumonia (CABP) and for the care system. He also speaks about the decision of inpatient vs outpatient care. This podcast is part 3 of a 3-part series on managing CABP. 

Additional Resources:

For more information on community-acquired bacterial pneumonia, visit our CABP Resource Center

Chuck Vega, MD, is a clinical professor of family medicine, the assistant dean for Culture and Community Education, and the director of the Program in Medical Education for the Latino Community at the University of California, Irvine in Irvine, California.


Jessica Bard: Hello everyone and welcome to another installment of "Podcast 360," your go‑to resource for medical news and clinical updates. I'm your moderator, Jessica Bard, with Consultant360 Specialty Network.

According to the most recent data available from the CDC, there were 1.5 million visits to emergency departments in the United States with pneumonia as the primary diagnosis in 2018.

Dr Charles Vega is here to speak with us today about community acquired bacterial pneumonia, CABP, the financial implications for the care system, and for patients of the various treatments and the decision of inpatient versus outpatient care.

Dr Vega is a clinical professor of Family Medicine, the Assistant Dean for culture and community education, and the director of the program and medical education for the Latino community at the University of California Irvine, in Irvine, California.

Thank you for joining us today, Dr Vega. What are the impacts of common therapy choices, treatment duration, and care setting on the cost for the patient and for the healthcare system?

Dr Charles Vega: Again, I think it's just worth noting how incredibly common community acquired pneumonia is, in the US. It's the leading cause of hospitalization among adults and children in the US. 2.2 percent of all visits to the ED were for community acquired pneumonia.

That was a study that evaluated a broad US population 2006 to 2009 and so that totals up to over 1.5 million unique adults with community acquired pneumonia hospitalized annually with 100,000 deaths approximately during hospitalization. Of course, we see a disproportionate share of older adults being affected by community acquired pneumonia.

Because for cases of CAP, and in older adults, nearly 40 percent will result in hospitalization and the average length of stay of those hospitalizations is 5.6 days. That causes medical costs in excess of $18,000 per inpatient episode and looking at the aggregate economic burden of community acquired pneumonia, it's over $13 billion annually.

It's a very common illness that is resource intensive, disproportionately affects older adults, and has a lot of severe economic consequences as well.

Jessica: Speaking of economic consequences, what are the financial implications of resource utilization?

Dr Vega: It's what I described. It's not just the direct medical costs, but it's also lost productivity. That's something that has to be factored in as well with such a common illness.

I'll just mention that there is research has looked at the cost of prevention for community acquired bacterial pneumonia versus some of the other common illnesses we see. For example, in 2014 2015, the total US cost for pneumococcal and flu vaccines totaled a little over $40 million.

That same year, the cost for preventive medications against cardiovascular disease and cardiovascular events totaled $661 million. The cost for preventative medications to prevent osteoporotic fracture, $169 million.

We really need to invest in prevention here and ounce of prevention is worth the pound of cure, certainly when it comes to prevention of pneumonia. Therefore, let's get those vaccination rates higher. Let's get those chronic illnesses treated better so we can prevent community acquired bacterial pneumonia in the first place.

Jessica: What are the financial implications of changing payment models for CABP, specifically bundled care versus per event?

Dr Vega: Yeah, bundled payments are an interesting and evolving story. They were designed to really help control costs. They were focused initially on procedures that were very expensive, particularly cardiovascular, and orthopedic surgical procedures.

In those cases, if we look at how bundled payments have worked, they really have reduced costs, but that's been in large part based on lower reimbursement for providers. The providers themselves were getting lower reimbursement that led to cost savings.

The record in terms of overall do‑bundled payments save a lot of money for Medicare, is more mixed particularly more ‑‑ we're thinking about ‑‑ medical diagnosis, such as community acquired bacterial pneumonia. Bundled payments are associated with some reduced hospital internal costs.

This suggests that hospitals have found ways to increase efficiency of patient care in multiple different conditions, but there's not really been a difference in quality of care when you look at readmission rates, or when you look at mortality rates, associated with bundled payments versus a fee‑for‑service model.

I think more work needs to be done in terms of the application of bundled payments in a thoughtful way that promotes better care of people. Then also more research in that where these outcomes actually are?

Jessica: What are the best practices for reducing variability in treatment and admissions or readmissions?

Dr Vega: I think that I take a very holistic approach. When I say holistic, I think about the social determinants of health being part of the main reason for readmission, which is why low educational attainment, low income is a big risk factor for admission and readmission.

I think about issues around poverty and access to care and how we all have some responsibility in being advocates to try to create a more level playing field that allows for greater health equity in the first place.

In care, as a primary care physician, I'm interested in things like vaccination, but also smoking cessation and control of chronic illnesses, which will lower the risk of severe pneumonia. Then finally, you're still going to have plenty of patients who develop community acquired bacterial pneumonia.

Follow the guidelines as best you can, avoid over testing especially with sputum testing as outpatients really doesn't make sense. Use of antigen testing as outpatients usually unnecessary as well and then, following patients closely.

I think so many clinicians are great with their instincts as to who is at risk for complications, and then making sure they have a telehealth appointment shortly thereafter with you. Also paying attention to those patients, maybe it's an older adults with dementia who has real problems accessing your center, either with telehealth or physically coming in.

Trying to address those barriers with them, being realistic about what the potential advantages and disadvantages are for each patient in terms of follow up, and then trying to address them to ensure particularly with a important diagnosis, such as CABP, so the patient does not do worse under your care.

Jessica: Is there anything else you'd like to add today about the financial implications of the various treatments?

Dr Vega: If you look at the guidelines, they recommend a more streamlined approach to diagnosis and then in terms of management using medications, which are generic and lower cost. That makes a lot of sense because in my setting, in my world, we have to start with those therapies first. They do work the vast majority of time and so therefore, I find them quite reliable.

Jessica: Thank you so much for your time today, Dr Vega. We really appreciate you joining us.

Dr Vega: Thank you. It's a pleasure.   

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