$1.2 Trillion wasted on Health Care Each Yearby Denise Early on Mar. 06, 2010, under Health
According to a recent CNN report, for every dollar the nation spends on health care, 50 cents is wasted. Wasteful spending may account for as much as $1.2 trillion of the $2.2 trillion spent on health care in the United States each year. The medical waste includes costs associated with inefficient insurance claims processing, defensive medicine, preventable hospital readmissions, medical errors, and unnecessary emergency room visits, according to a 2008 report by Pricewaterhouse Cooper’s Health Research Institute.
Doctors are also to blame according to Dr. Howard Brody from Texas. His op-ed in the New England Journal of Medicine (January 28, 2010) referred to studies that show too many doctors order too many unnecessary or unhelpful tests and procedures. For example, one study of seniors who had arthroscopic knee surgery showed no real benefit from this costly but common procedure as compared to a control group who received physical therapy.
In a New York Times interview Dr. Brody said, “When you combine this love affair with high technology with a reimbursement system that pays so much more for technology — and less for thinking and sitting and talking with patients — you end up with an expensive kind of medicine, which, when practiced by doctors, puts more money into their pockets.”
The 2008 Medicare trustees’ report on projected revenues and spending, estimated that Medicare will be $660 billion in the hole by 2023 unless health care spending slows down. We must absolutely reduce the annual growth in per capita spending from 3.5% (the national average) to 2.4% (which has been accomplished in San Francisco). A study showed that doctors in San Francisco order fewer tests and procedures than doctors in Florida and New York.
Copying the successful practices in San Francisco and putting them in place across the country would leave Medicare with a healthy estimated balance of $758 billion, a cumulative savings of $1.42 trillion, according to another study.
So, while insurance companies have been getting all the recent bad press, the problem in our health care system goes much deeper. We must address the overuse of hospitals and emergency rooms, the overuse of specialists, and too many tests and minor procedures.
What’s that I hear? It sounds like Tea Party crowds yelling, “They’re going to ration your healthcare!”