Section 5: Invest in Prevention

May 7, 2012 § 1 Comment

Three old American sayings capture the interconnections among personal responsibility, preventive medicine, and health care costs. Consider “You are what you eat,” and “An ounce of prevention is worth a pound of cure,” and “A penny saved is a penny earned.” If we as individuals take better care of ourselves, if we as a society take better care of ourselves, we’ll be not only healthier but also wealthier in the long run. Every Texan needs to have more skin in the health care game … especially those who have too much skin and fat already. We can no longer blow smoke at proven ways to stop people from smoking and exposing others to their secondhand smoke. We need a shot in the arm to stop the spread of deadly, contagious diseases. A healthy and wealthy Texas depends on a sound health care system with robust medical care and effective public health components. There is a legitimate role for limited government to play in safeguarding a sound, responsive public health infrastructure in Texas. All in all, a stitch in time does indeed save nine.

Encourage Texans to take personal responsibility for their own health

Texas needs to support our citizens in taking more responsibility for their health and health care decisions.

The leading causes of death and disability in Texas and the United States today are preventable because they are closely associated with personal lifestyle decisions. Texans’ personal behaviors contribute to more than 60 percent of all deaths in our state every year.

The key to maintaining health lies in helping patients assume responsibility for their own health with regular support from their physicians. Competent, compassionate medical care, delivered with professionalism, state-of-the-art clinical knowledge, and patient respect are critical components of this responsibility. Conversely, patients have a responsibility to make informed, healthy decisions.

Physicians must continue to emphasize the importance and power of personal responsibility in patients’ health outcomes. Over the past century, public health interventions have effectively reduced and, in some cases, eliminated illness and death. We must use education and preventive medicine measures to go further – to curb the need for the complex treatment required once a preventable condition develops. Each occurrence of preventable chronic disease is costly to Texas’ government and businesses, to our economy, and to our people.

Personal health and wellness depend on the behavioral decisions we make as well as the social and environmental factors to which we are exposed throughout a lifetime. Four out of 10 Texas adults report at least one factor – high cholesterol, obesity, high blood pressure, a sedentary lifestyle, or a smoking habit – that puts them at high risk of developing a chronic disease.[i] Many adults have more than one risk factor and can develop multiple chronic conditions.

These chronic diseases are killers that strike down Texans before their time. Tobacco, for instance, is directly responsible for the death of 24,000 Texans each year.[ii] This is more than homicide, HIV, suicide, influenza and pneumonia, accidents, and diabetes — combined.

Patients and their families trust their physicians to guide and influence decisions made to protect the patient’s health. However, with the massive information and misinformation in today’s super technology-driven environment, each patient and family needs the truth. Health literacy – patients’ education and ability to read, follow instructions, and communicate verbally – also affects their health. Nine out of 10 adults struggle with fully understanding basic health information as seen in advertisements, stores, the news, and in their communities.[iii]

All physicians and health care providers need to educate themselves on the cross-cultural dynamics that can impact a patient’s understanding and compliance with treatment. So, too, must the government’s education efforts evolve to accommodate the diverse cultures among poorer populations to ensure materials and programs connect with our population.

Invest in a public health-prevention infrastructure

Many of Texas’ health problems are associated with socioeconomic and environmental factors, such as neighborhood, poverty, and education level. These factors influence our health both individually and as groups. They contribute disproportionately to health disparities including premature death. Partnering with public health is a way for physicians to maximize limited resources and capacity, and address factors in Texas communities that influence health.

The increase in the number of older Texans during the coming decades will have dramatic consequences for public health, the health care financing and delivery systems, informal caregiving, and pension systems. More older adults and increasing chronic disease will further strain resources in Texas counties where basic public health concerns (e.g., control of infectious diseases and maternal and child health) are yet to be addressed fully.

Complicating matters is the largely ignored public health framework of previous decades. Public health functions such as disease registries and surveillance systems have not kept up with the accelerated changes of health information technology. Many registries and systems, therefore, are not widely accessible nor do they contain data that are timely enough for effective intervention.

As Congress and the Texas Legislature have tried to reduce overall health care spending, they unfortunately have reduced funding for medical education and population-health-focused infrastructure as well. Health disparities may be reduced by increasing the number of ethnic minorities working in health occupations; this will become especially important as the minority population in Texas grows. As the primary advocate for patients, TMA is concerned about our ability to provide care in general, but particularly to these traditionally underserved communities.

Savings From Every $1 Spent on a Vaccine[iv]



Diphtheria, tetanus, pertussis


Measles, mumps and rubella


Perinatal hepatitis B




Haemophilus influenza B




Physicians face many challenges in caring for patients who present with preventable illnesses and complications. Physician participation in local and state efforts to improve health literacy and public health education programs could enhance the effectiveness of these programs substantially.

Invest in preventive care for low-income women

Lost in the highly charged political debate is the fact that “women’s health” includes far more than abortions. If Texas and the federal government cannot resolve their differences, the state must continue to find a way to finance the Texas Women’s Health Program.

The Women’s Health Program, which does not provide abortions, delivers cost-effective basic health care screenings — such as for cancer, high blood pressure, and diabetes — as well as birth control. This is the only source of such preventive care for many low-income women in Texas.

More than 70 percent of pregnancies among single young women in Texas are unplanned.[v] Increasing the number of women who enroll in the Women’s Health Program after a Medicaid delivery is especially important. Women who have had a Medicaid-funded delivery are at particularly high risk for subsequent pregnancy, often so soon that risks of prematurity and low birth weight are elevated. Babies born too soon or too small often have significant health problems, such as respiratory or developmental delays, contributing to higher medical costs at birth and as the child ages. In 2007, unplanned Medicaid births cost the state more than $1.2 billion.[vi]

Increase immunization by reducing barriers for all Texans

Vaccines are some of the safest and most cost-effective ways of preventing infectious disease. Texas has made great strides in the last few years in vaccinating young children. In 2010, an estimated 75 percent of Texas children aged 19-35 months had received the recommended series of vaccinations.[vii] We must continue our work protecting children and adults in Texas from preventable and potentially fatal diseases.

Properly vaccinating all children born in the United States would prevent more than 14 million cases of disease during their lifetime and 33,500 deaths.[viii] The Centers for Disease Control and Prevention (CDC) says every dollar spent on a childhood vaccination saves $6.30 in direct medical costs. Adding in the costs of lost work time, disability, and death, brings the return on investment to $18.40 for every dollar spent.[ix]

Texas needs a strong public and private immunization infrastructure for all Texans from infancy until well past 65 years. We must make substantial progress over the next decade to meet national vaccination targets.

With legislation passed in 2011, Texas is set to lead the nation in ensuring health care workers are properly vaccinated and do not spread preventable diseases to patients.

Texans depend on their physicians and their medical home to stay up to date on their vaccinations. But Texans are mobile and their insurance coverage changes, so we need a statewide immunization registry with information on vaccinations of all Texans.

With more than one in four Texans uninsured, Texas needs a strong local and state public health system to complement the vaccinations that physicians and other health care workers provide.

Older adults are especially vulnerable to infectious disease, thus the state must continue to promote immunizations such as pneumococcal vaccine for these individuals. The Texas Department of State Health Services has identified bacterial pneumonia as one of the top three potentially preventable hospitalizations in Texas. Combined efforts of physicians, providers, government officials, and community organizations have been shown effective in reducing the number of potentially preventable hospitalizations due to infectious diseases. These efforts should be enhanced. (See Section 3 for more details.)

Invest in obesity control

Overweight and obesity contribute to diabetes, hypertension, heart disease, cancer, and stroke. Texas has an easy-to-see obesity crisis. Some 66 percent of Texas adults are obese; the United States average is 63 percent. During the past three decades, obesity rates in children have more than tripled in the country. Today, 32 percent of Texas children (ages 10-17) are obese.[x]

Percent of Children Whose Weight Status Is at or Above
the 85th Percentile for Body Mass Index


The obesity epidemic, and the ever-younger age groups that it strikes, threatens Texas’ physical and fiscal health. Texas’ continually expanding waistline correlates to our health care cost demands. Obesity is responsible for 27 percent of the growth in health care spending. Treating obese patients costs 37 percent more than treating normal-weight patients.[xii]

The rise in overweight and obesity is affecting the bottom line of Texas employers. The Texas Comptroller’s Office found that in 2009, obesity cost Texas businesses an estimated $9.5 billion, due to higher employee insurance costs, absenteeism, and other effects. Left unchecked, obesity could cost employers $32.5 billion annually by 2030.

Total Projected Obesity Costs to Texas Businesses, 2009-30
(in billions)


Improved physical health in students has been linked to academic success. Conversely, children with obesity are more prone to absences and lower grades. In the United States, students who are physically active at least 60 minutes on most days, play on at least one sports team, or watch fewer than three hours of television per day consistently have “mostly A’s.”[xiv]

A great proportion of obese adults were overweight or obese as children. This serious risk factor is found in Texas, where more than 30 percent of children in grades 4 through 11 are overweight or obese.[xv] A child who is overweight at age 12 has a 75-percent chance of being overweight as an adult.[xvi]

There is no single solution to preventing or addressing obesity. Multiple evidence-based approaches must be pursued for physicians, communities, schools, and workplaces, and each must identify potential barriers to implementing local programs.[xvii]

Invest in tobacco cessation

Texas pays a high price for tobacco addiction. Each Texas household pays an average of $568 in state and federal taxes each year for smoking-related costs.[xviii]

Annual Medical Savings by Condition for Each Smoker Who Quits


Annual Savings

Coronary health disease and stroke


Childhood asthma


Low birth-weight babies


Other childhood respiratory conditions


Childhood otitis media


Adult pneumonia


Annual Total


The direct and indirect costs to Texas businesses from tobacco use are significant, and there are significant medical savings when a smoking worker stops smoking. For Texas businesses, “smoking cessation is the gold standard of health care cost effectiveness.”[xx] America’s Health Insurance Plans and Kaiser Permanente developed a return on investment calculator for health plans and employers that helps employers understand the cost-effectiveness of different types of tobacco cessation programs, up to $197 per $1 invested over five years.

More than 24,000 Texans die each year from smoking-related illness. Tobacco is the single greatest cause of preventable and premature death and illness in the world.[xxi] Adults who smoke are at substantially greater risk of developing chronic diseases and conditions including multiple types of cancer, increasing their risk of diabetes complications, cardiovascular disease, and stroke. Children exposed to secondhand smoke are more likely to develop respiratory problems and acute illnesses. Almost every major system in your body is affected by smoking or secondhand smoke.

In 2012, total revenue to Texas from tobacco taxes and fees and tobacco settlement funds is expected to be $1.9 billion. But Texas will spend less on tobacco prevention in 2012 than most other states, ranking 39th in the nation for tobacco prevention expenditures. CDC recommends that Texas spend $266 million on tobacco prevention to have an effective and comprehensive tobacco prevention program. In 2012, Texas will spend a paltry $6 million in state funds on tobacco prevention.[xxii]

So far, 30 states have passed smoking bans in restaurants and workplaces. About 40 percent of the Texas population is protected by 100-percent smoke-free local ordinances. Thirty-three Texas cities and towns prohibit smoking in all bars and restaurants and non-hospitality workplaces (2011), but many areas of Texas do not have a smoking ban. [xxiii] Texas communities that implemented these bans are, in effect, subsidizing health care services in those areas that have not adopted similar bans.

Almost three-fourths (70 percent) of Texans favor a statewide ban on smoking at the workplace and public buildings.[xxiv] Personal liberty arguments against such ordinances ignore and overlook the rights of non-smokers and Texas taxpayers who are burdened with the poor choices of some. Texas must be freed from this unnecessary cost and addiction.


  • Actively involve patients in the health care decisionmaking process.
  • Promote participation in smoking cessation programs, worksite wellness, and routine screenings.
  • Provide incentives via merit grants that recognize those state agencies that are promoting productive worksite wellness efforts.
  • Continue full funding for the Texas Women’s Health Program.
  • Streamline efforts to vaccinate people who work with high-risk populations.
  • Support statutory changes that allow parents of Texas schoolchildren access to data specific to the schools their children attend regarding the number of conscientious objector claims to vaccination.
  • Improve access to vaccinations, including improvements in the state’s Vaccine for Children Program and the adult safety net programs; this will ensure uninsured and low-income persons can get appropriate vaccinations.
  • Keep public health disease surveillance systems robust.
  • Increase funding for improving access to healthy foods; increase access to parks and recreational facilities; and promote worksite wellness policies.
  • Improve the health of Texas students by increasing physical activity and reducing barriers to student participation in safe school sport activities.
  • Promote physician participation in school health advisory committees and other public health prevention programs. Support legislation that requires inclusion of a primary care physician on all school health advisory committees.
  • Require Texans who smoke and communities that allow it in public venues to fund an increasing portion of health care costs related to smoking-related illnesses.
  • Adequately fund proven interventions to reduce tobacco use, such as Texas’ Quitline and education in schools.
  • Provide smoking cessation benefit coverage for state employees and retired teachers.
  • Support legislation that would require public workplaces, venues, and restaurants to have an indoor smoke-free policy.

[i] Bureau of Disease, Injury and Tobacco Prevention. Texas Department of Health. Cardiovascular Disease in Texas: A State Plan with Disease Indicators and Strategies for Action. Available at  Accessed April 2012.

[ii] Texas Department of State Health Services. Mental Health & Substance Abuse Division. Tobacco Prevention & Control Strategic Plan for 2008-2013. July 2007. Available at  Accessed April 2012.

[iii] U.S. Department of Health and Human Services, Office of Disease Prevention and Health Promotion. National Action Plan to Improve Health Literacy. June 2010. Available from Accessed April 2012.

[iv] Adapted from Every Child By Two: Economic Value of Vaccines. Available from Accessed April 2012.

[v]Texas DSHS communication; average for 2004-06.

[vi]Based on data provided by Texas DSHS for 2007: HHSC average Medicaid birth cost.

[vii] The Henry J. Kaiser Family Foundation. State Health Facts. Texas: Childhood Immunizations. 2010. Available at  Accessed April 2012.

[viii] Zhou F. Updated economic evaluation of the routine childhood immunization schedule in the United States. Presented at the 45th National Immunization Conference. Washington, DC; March 28–31, 2011.

[ix] Rapoport, Ross. Cox News Service. CDC: Immunizations High But Shot In Arm Still Needed August 2003.

[x] The Henry J. Kaiser Family Foundation. State Health Facts: Texas. Health Status. 2010. Available at  Accessed April 2012.

[xi] 2007 National Survey of Children’s Health

[xii] Finkelstein, Eric et al. Annual Medical Spending Attributable To Obesity: Payer-And Service-Specific Estimates. Health Affairs, 28, no.5 (2009):w822-w831.

[xiii] Wangrin, Mark. Gaining Costs, Losing Time: Costs Grow Along With Waistlines. Fiscal Notes. July 2011. Available at Accessed April 2012.

[xiv] Center for Disease Control. Physical Inactivity and Unhealthy Diet Behaviors and Academic Achievement. Available at  Accessed April 2012.

[xv] Arons, Abagail. Childhood Obesity In Texas: The Costs, The Policies, and a Framework for the Future. January 2011. Available at Accessed April 2012.

[xvi] Childhood Obesity in Austin, Texas. Available at  Accessed April 2012.


[xviii] Campaign for Tobacco Free Kids. The Toll of Tobacco in Texas. March 2012. Available at Accessed April 2012.

[xx] AHIP. Making the Business Case For Smoking Cessation. Available at Accessed April 2012.

[xxii] Robert Wood Johnson Foundation. A Broken Promise to Our Children: The 1998 State Tobacco Settlement Thirteen Years Later. November 2011. Available at  Accessed April 2012.

[xxiii] American Nonsmokers Rights Foundation. Percent of U.S. State Populations Covered by 100% Smokefree Air Laws. April 2012 . Available at Accessed April 2012.

[xxiv] Campaign for Tobacco-Free Kids. Voters Across The Country Express Strong Support For Smoke-Free Laws. Available at Accessed April 2012.

Section 3: Promote Efficient and Effective New Models of Care

May 7, 2012 § 1 Comment

(Right Care, Right Person, Right Time, Right Place)

No one worries about the spiraling cost of U.S. health care more than physicians. Our current health care delivery system does too little to coordinate care for patients with expensive-to-manage chronic conditions. We don’t make the most effective use of allied health practitioners. We are requiring physicians to invest in high-dollar health information technology (HIT) systems without ensuring that the investment translates into better patient care. We are responding to calls to measure a physician’s effectiveness and efficiency but are concerned that the measures are not focusing on the right metrics. The way to save money in health care is not through ill-advised, random rationing of care, but rather through systems that ensure the right professional provides the right care, at the right place, and at the right time.

Promote the patient-centered medical home for every Texan

Consider that the costliest 1 percent of patients in the United States account for more than 20 percent of what the nation spends on health care. They are older patients with cancer, diabetes, heart disease, and other serious chronic conditions. Many have multiple health problems, and their relatives might not be helping with their care. Most have private insurance and are white and female.[1]

As public and private payers look for ways to lower costs, improve patient outcomes, and ease burdens to access, they are turning to models of care that both increase economic efficiencies and enhance patient care. One of these is the patient-centered medical home (PCMH) model. A PCMH is a primary care physician or physician-led team who ensures that patient care is accessible, coordinated, comprehensive, patient-centered, and culturally relevant. They directly provide, coordinate, or arrange health care or social support services as indicated by the patient’s individual medical needs and the best available medical evidence. The model uses a team-based approach with the patient’s primary care physician leading the overall coordination of care. Trained teams and well-constructed electronic health records (EHRs) are key to a successful PCMH.

TMA supports the use of the PCMH model in Medicare, Texas Medicaid, and commercial insurance plans. Public and private payers have, increasingly, been looking to this model as a way to reduce fragmented care, lower costs, avoid repetitive and costly procedures, and improve patient outcomes. Given the budget constraints that Texas faces and a growing population with unique health care needs, the PCMH offers the potential for Medicaid cost savings as well as improved patient outcomes and physician and provider satisfaction.

In recent years, numerous states have implemented PCMH initiatives that engage both private and public payers. While each program design was unique and each measured success differently, these initiatives showed improved outcomes and reduced costs. Below are just a few examples of PCMH successes.[2]

  • In a recent Blue Cross Blue Shield pilot in Colorado, New Hampshire, and New York, the program showed an 18-percent decrease in acute inpatient admission rates compared with an 18-percent increase in the non-medical home group. Additionally, there was a 15-percent decrease in the rate of emergency department visits, compared with a 4-percent increase in the non-PCMH group.
  • Oklahoma saw complaints about access to same-day or next-day care decrease from 1,670 in 2007 (the year before PCMH implementation) to 13 in 2009 (the year after implementation). Oklahoma saw a decline in expenses of $29 per patient per year from 2008 to 2010.
  • Inpatient hospital admissions for aged, blind, and disabled Medicaid beneficiaries participating in Community Care of North Carolina decreased 2 percent between 2007 and the middle of fiscal year 2010. Inpatient hospital admissions for the unenrolled beneficiaries increased 31 percent over the same time period. Overall, Community Care of North Carolina saved nearly $1.5 billion in costs between 2007 and 2009.

Promote physician-led team care

Texas has a fast-growing population and needs to work toward a 21st century health care workforce. More than ever, caring for larger panels of patients – particularly in primary care medical homes – will involve the skills of many different practitioners. Central to this concept is that these physician-led teams will utilize a number of health care professionals, each bringing important skill sets and training to patient care. Physicians will continue to provide patient care services, but they also will be called upon to manage the team’s care for larger populations, out of necessity and for essential coordination.

Team care will require cooperation and collaboration among all professionals, with a focus on quality, measureable outcomes, and efficient utilization of resources. It will be essential that the patient receive the right care, at the right time, by the right professional, in the right venue.

The physician is the highest-trained team member. It therefore falls to the physician – as both provider of care and manager of services delivered by others on the team – to supervise, implement science-driven and objective treatment protocols, coordinate the services of other professionals as well as medical specialists, and ultimately remain accountable for each patient’s care.

Integrating the talents of a diverse medical team under physician leadership will be one of the key challenges in the coming decade. Without physician direction, supervision, and management (or if the system evolves to accommodate teams led by practitioners with lesser training), medical care will trend toward even more fractured care, higher-than-necessary utilization, and creeping inefficiencies. This will lead to even higher costs, duplications of services, and lower-quality patient care. These inefficiencies in turn will hamper efforts to improve access to care.

Support physician-led efforts to document quality and efficiency

The physician-led teams will be the linchpin of our future health care delivery system. Directly and indirectly, physicians will impact both health care quality and costs. Measuring their performance to identify weaknesses that warrant change creates tremendous opportunity to improve health care quality and efficiency.[3]

Physician performance measurement and improvement may prove a lost opportunity for strengthening the health care system if we do not appropriately address methodological and other shortcomings of existing efforts. Too many government programs and commercial insurance companies, for example, rely on data from claims submitted for payment rather than on a close examination of the care delivered to the patient. All quality improvement programs should adopt a national set of standard, meaningful, evidence-based measures that improve both patient outcomes and patient satisfaction.

The primary goal of any quality program must be to promote safe and effective care across the health care delivery system. Getting the right care to the patient at the right time will reduce overall costs in the long run. Fair and ethical quality programs are patient-centered and link evidence-based performance and improvement measures to financial incentives.

Provide significant investment in health information technology

As in nearly every other sphere of modern life, technology has delivered enormous improvements in medicine. Once-unimaginable diagnostic tools and treatments are now commonplace. HIT has tremendous potential to advance the quality of care, prevent medical errors, and streamline health care delivery systems. Recognizing this potential, the government and employers are pushing physicians and providers to adopt HIT quickly so they can better measure the value they receive for their health care dollar. Physicians themselves, of course, are motivated to provide the best possible care, which in modern times involves the use of various technologies, including HIT.

TMA supports the development of a strong HIT infrastructure in Texas that furthers the quality and cost-effectiveness of patient care and simultaneously protects the privacy and security of patient information. In embracing new applications of technology for patient care and patient-physician communication, appropriate standards need to be developed and maintained to ensure this occurs. For example, a lower standard of care is not justified merely because the patient lives in a remote area and may receive some treatment via telemedicine.

Electronic Health Records

The American Recovery and Reinvestment Act of 2009 allocated more than $90 million in grants to Texas to improve HIT across the state. The Health Information Technology for Economic and Clinical Health Act authorized incentives of up to $63,750 for physicians participating in Medicare and Medicaid who adopt and meaningfully use EHRs. These incentives are particularly helpful as the technology is very expensive, and physicians – especially in solo and small group practices – frequently cite cost as a major barrier to EHR adoption.[4] The federal government also established four Texas regional extension centers to help primary care physicians select, implement, and achieve meaningful use of EHRs.

About half of office-based physicians use an EHR in their practice. With the recent Medicare and Medicaid incentives, this number is expected to grow to 75 percent by 2018.[5] As HIT use continues to expand, it is vital for Texas to protect patients and their physicians in this evolving environment.

Many times, government agencies and payers put demands on physicians that disrupt workflow. These demands come on top of the already extensive disruptions and intrusions physicians experience. As they decide or are required to move from a paper to an electronic health record, Texas must carefully consider the impact of any new regulatory burdens placed on the physician practice, especially when many of these burdens do nothing to improve care quality. For instance, to achieve the goals of “meaningful use,” the federal government requires that physicians have a system that tracks patients’ height, weight, and blood pressure as part of “structured data.” This is required even if the physician practices a specialty where height and weight play little or no role in the medical care they provide to patients. Do patients really want to be weighed at the ophthalmologist when updating their eyeglass prescription? According to the federal government, if a physician “believes that one or two of these vital signs are relevant to their scope of practice, then they must record all three vital signs in order to meet the measure of this objective and successfully demonstrate meaningful use.” Texas should not repeat the mistakes of the federal government.

Texas must recognize that not every medical practice will benefit from an EHR. In fact, it could be disruptive to some and could hurt patient care. Requiring a physician to rely on a system that is counter-intuitive to his or her clinical training could result in adverse outcomes for the patient.

In some cases, EHRs are cost-prohibitive regardless of federal incentives. Not all physicians are eligible for the Medicare or Medicaid EHR incentives. The average EHR purchase cost is about $40,000 per physician,[6] not including productivity dips that hurt practice revenues. Some medical practices operate on such thin profit margins that the capital investment of an EHR could lead to bankruptcy.

Health Information Exchanges

Health information exchanges (HIE) are designed to help physicians and providers share patient information securely. To promote the electronic exchange of medical information, patients and physicians must be assured that patient data are adequately protected by those who operate the HIE.

Stop potentially preventable hospitalizations

From 2005 to 2009, the Texas Department of State Health Services (DSHS) estimates that Texas spent $32 billion on hospital charges for potentially preventable conditions. For example, a recent University of North Texas study of chronic obstructive pulmonary disease (COPD), which is considered a potentially preventable condition, found that from 2005 to 2008, COPD cost Texas $2.7 billion.

“The main issue in the readmissions lies not in procedural errors but rather in fully resolving the initial medical complaint and creating an effective transition from the hospital to care in the community or a post-acute facility.”

Potentially preventable hospital readmissions cost Texas Medicaid an estimated $105.9 million in fiscal year 2010. This does not include physician services or other care that is related to the readmission. A January 2012 Health and Human Services Commission report found there were about 15,000 hospital readmissions within the Medicaid program in 2010. Of these, 23 percent were for treatment of the same condition as the initial admission, almost 30 percent were for an acute condition that may have had some relationship to the initial admission, and 23 percent were for mental health or substance abuse readmissions based on conditions related to the initial admission. Correspondingly, it appears that just 2 percent were from post-surgical complications.[7]

While these are all potentially preventable readmissions, not all are actually preventable. Many of these costs and associated morbidity are avoidable if patients have access to appropriate outpatient health care and proven preventive services such as vaccinations and obesity reduction. The savings from better management, including both patient compliance and use of evidence-based practices, will yield significant savings to the state and improve patient outcomes.

Potentially preventable hospitalization conditions include bacterial pneumonia, dehydration, urinary tract infections, congestive heart failure, hypertension, asthma, chronic obstructive pulmonary disease, and complications from diabetes.

Readmission is also more prevalent if the patient has a mental health or substance use disorder. Of the top four Medicaid diagnostic codes for both 2009 and 2010, mental health conditions accounted for the highest number of potentially preventable readmissions.[8]

DSHS received $2 million from the Texas Legislature in 2011 to design strategies to reduce potentially preventable hospitalizations. DSHS contracted with 16 Texas counties to reduce hospitalizations and/or hospital charges for adult potentially preventable hospitalizations. DSHS already has demonstrated via interventions in Red River, Freestone, and Limestone counties that we can reduce the incidence of hospitalization for certain conditions.

Our state clearly struggles with certain disease conditions. Particular portions of the state clearly struggle more than others. Potentially preventable hospitalizations are a burden to patients and their physicians, facilities, insurers, and taxpayers. This is not solely a government problem, but because of the enormous cost of potentially preventable hospitalizations and their impact on public and private payers, we need a community response.

Top Five Potentially Preventable Hospitalizations for Adult Residents of Texas (2005-2009)

Number of Hospitalizations

Average Hospital Charge

Total Hospital Charges

Congestive Heart Failure




Bacterial Pneumonia




Diabetes Long-Term Complications




Chronic Obstructive Pulmonary Disease




Urinary Tract Infection




Invest in mental health and substance abuse community treatment

Mental illness and substance abuse hurt the Texas economy through lost earning potential, treatment of coexisting conditions, disability payments, homelessness, and incarceration.

Mental illness is a leading cause of disability in the United States. About 13 million adults have a debilitating mental illness each year, and almost half of all adults will be affected by mental illness in their lifetime. Five percent of adults have a serious mental illness.[9] About one in five children are affected by a mental health disorder with severe impairment in their lifetime.[10]

More than 8 percent of Texas adults report current depression,[11] and 5.2 percent report serious psychological distress.[12] In 2011, almost 30 percent of Texas high school students reported they felt sad or hopeless almost every day for at least two weeks.[13] Suicide is a leading cause of death among Texans under 35 years.[14]

More than 66,000 Texans were cared for in state-funded substance abuse treatment programs in 2010.[15] Substance use is common in Texas students (grades 7-12), with 62 percent reporting they had used alcohol and 17.2 reporting inhalant abuse.[16] Despite significant legislation to curtail drinking and driving, almost 40 percent of Texas driving fatalities are still associated with alcohol use. [xvii]

In 2009, 23 percent of the adult offenders in Texas state prisons, on parole, or on probation were current or former clients of the Texas public mental health system.[xviii] A Texan with a serious mental illness is eight times more likely to be in a jail than in a hospital or treatment program, at a cost of $50,000 a year. A person in jail without a mental illness costs the state about $22,000 annually.[xix]

Mental illness is also strongly associated with high-risk behaviors such as alcohol, tobacco, and illicit drug use, and results in conditions such as obesity. U.S. mental health costs were estimated to be $57.5 billion in 2006 including the cost of mental health care and the indirect costs of disability caused by mental illness.[xx] One recent study estimates that Texas state dollars spent on mental health exceed $13 billion each year.[xxi]

Mental health treatment costs in the United States totaled almost $9 billion in children in 2006; Medicaid covered more than one-third of these costs.[xxii]

Proper care for persons with mental illnesses saves costs associated with the cycle of incarceration, homelessness, and so forth. Assessing the return on investment connected with mental health and substance abuse care is complex because there are many different diagnoses, and the disability caused by each and the treatment plans vary greatly. In 2003, depression cost U.S. employers $44 billion in lost productivity alone. One employee assistance program in California showed a return on investment of $5.17 to $6.47 for every dollar spent on employee assistance for a mental health problem.[xxiii]

While Texas has recently made significant investments in community mental health services, we still rank 50th in state public mental health funding per capita.[xxiv]


  • Advocate for the patient-centered medical home (PCMH) model and financial incentives from both state and private payers. Recognize the significant start-up costs for transforming a typical primary care, fee-for-service practice into a fully functional medical home.
  • Provide financial incentives that many physician practices absolutely will need to implement electronic health records (EHRs) and other health information technology (HIT).
  • Support the use of physician-directed medical teams focused on high-quality, evidence-based care; efficient delivery; and improved access. (Right care, Right person, Right time, Right place)
  • Require regulatory agencies to align physician office technology requirements so they minimize the disruption to physician workflow and patient care in the development and use of EHRs and electronic prescribing.
  • Encourage development of EHR systems that utilize a common, open platform that will improve care coordination and limit possible negative impacts to physicians in areas like hospital credentialing.
  • Prohibit a health information exchange (HIE) from inappropriately shifting liability for its own negligent acts to physician HIE participants.
  • Ensure that evidence-based quality-of-care measures are the primary measures used in any health care quality improvement program and that program design supports the patient-physician relationship.
  • Explore collaborative relationships with the federal government that could save Medicare funds by reducing potentially preventable hospitalization conditions while sharing savings with Texas, physicians, health care providers, and local communities.
  • Identify and capture possible savings by reducing potentially preventable hospitalizations for workers and retirees covered by the Teachers Retirement System and the Employee Retirement System.
  • Increase funding for community-based mental health and substance abuse care.

[1] Cohen, Steven and Yu, William. Agency for HealthCare Research and Quality, Medical Expenditure Panel Survey. Statistical Brief #354: The Concentration and Persistence in the Level of Health. Expenditures over Time: Estimates for the U.S. Population, 2008-2009.January 2012. Available at Accessed April 2012.

[2] Kaye, Neva et al. The Commonwealth Fund. Building Medical Homes: Lessons From Eight States with Emerging Programs. December 2011. Available at Accessed April 2012.

Cadet, Justine. HIMSS/CHIME: If you’re not on the patient-centered medical home train, you’re late! February 2012. Available at Accessed April 2012.

[3] Centers for Medicare & Medicaid Services. National Health Expenditures: 2007 Highlights. Available at Accessed April 2012.

[4] Texas Medical Association.  TMA Survey Electronic Medical Records Report Fall 2009. 2009. Available at Accessed April 2012.

[5] Texas Medical Association.  TMA Survey Electronic Medical Records Report Fall 2009. 2009. Available at Accessed April 2012.

[6] Texas Medical Association. EHR Comparison Tool: Pricing Section. September 2011. Available at Accessed April 2012.

[7] Texas Health and Human Services Commission. Potentially Preventable Readmissions in the Texas Medicaid Population, Fiscal Year 2010. Page 17. January, 2012. Available at Accessed April 2012.

[8] Texas Health and Human Services Commission. Potentially Preventable Readmissions

in the Texas Medicaid Population, Fiscal Year 2010. January 2012. Available at Accessed April 2012.

[9] National Institute of Mental Health. Any disorder among adults. Available from Access April 2012.

[10] Merikangas KR, He J, et al., Lifetime prevalence of mental disorders in U.S. adolescents: Results from the National Comorbidity Study, supplement (NCS-A), Journal of the American Academy of Child and Adolescent Psychiatry. 2010 Oct;49(10):980-9.

[11] Center for Disease Control. Behavioral Risk Factor Surveillance Survey. 2006 Survey Data.  Available at  Accessed April 2012.

[12] Center for Disease Control. Behavioral Risk Factor Surveillance Survey. 2007 Survey Data.  Available at Accessed April 2012.

[13] Texas Education Agency.  Youth Behavior Survey. 2009. Available at Accessed April 2012.

[14] Texas Department of State Health Services. Center for Health Statistics. Table 17: Five Leading Causes of Death by Sex and Age Texas Residents, 2008. Available at Accessed April 2012.

[15] Texas Department of State Health Services. Substance Abuse Trends in Texas: June 2011. Available from Accessed April 2012.

[xvii] Alcohol Alert. Texas Drunk Driving Statistics. Available at Accessed April 2012.

[xviii] Texas Department of State Health Services.  Decision Support Unit. Another Look at Mental Illness and Criminal Justice Involvement in Texas: Correlates and Costs. 2010. Available from Access April 2012.

[xix] National Alliance on Mental Illness of Texas. Helping Texas Families and Saving Taxpayer Dollars. Available at Accessed April 2012.

[xxi] The Perryman Group. Costs, Consequences and Cures!!! An Assessment of the Impact of Severe Mental Health and Substance Abuse Disorders on Business Activity in Texas and the Anticipated Economic and Fiscal Return on Investment in Expanded Mental Health Services. May 2009. Available at Accessed April 2012.

[xxii] Brown, E. Agency for Healthcare Research and Quality. Health Care Expenditures for Adults Ages 18-64 with a Mental Health or Substance Abuse Related Expense 2007 versus 1997. Statistical Brief #319. March 2011. Available at Accessed April 2012.

[xxiii] Hargrave, George et al. EAP Treatment Impact on Presenteeism and Absenteeism: Implications for Return on Investment . Journal of Workplace Behavioral Health. 2008. Oct 23(3):283-293.

[xxiv] Honberg R., Diehl, S., et al. National Alliance on Mental Illness. State Mental Health Cuts: A National Crisis. March 2011. Available at Accessed April 2012.

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