How the U.S. Health-Care System Wastes $750 Billion Annually
bootlegga @ Mon Sep 10, 2012 2:18 pm
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$1:
Every year, the United States spends eight times as much money on unnecessary health-care costs as the Pentagon spent for each year of its operations in Iraq.
The massive annual waste is the takeaway from a new report by the Institute of Medicine (IOM), which estimates that the country loses some $750 billion annually to medical fraud, inefficiencies, and other siphons in the health-care system. In comparison, the Defense Department budgeted $757.8 billion for the war in Iraq over the eight years it was there.
The IOM's analysis acknowledges a little bit of overlap among the categories, so it altogether adds up to slightly more than $750 billion:
More than 18 months in the making, the report identified six major areas of waste: unnecessary services ($210 billion annually); inefficient delivery of care ($130 billion); excess administrative costs ($190 billion); inflated prices ($105 billion); prevention failures ($55 billion), and fraud ($75 billion). Adjusting for some overlap among the categories, the panel settled on an estimate of $750 billion.
By far the biggest black hole when it comes to waste has to do with how we practice medicine -- over half of it is accounted for by unnecessary services, inefficient care, or the failure to prevent problems that require expensive intervention.
The report underscores how much we could save just by encouraging doctors to order fewer procedures and, on the patient side, by taking a more active interest in lifestyle monitoring. The IOM offers a few specific examples:
- Patients don't need to get more than one colonoscopy every 10 years.
- If you had a fainting spell but it didn't come with a seizure, you can safely forego a $2,000 MRI.
- Avoiding expensive imaging studies for early complaints of back pain.
Industry giants are already moving beginning to catch on to these ideas on their own, even independently of the Affordable Care Act, so chances are looking good that we'll soon cut down on at least some of these inefficiencies and wastes.
The massive annual waste is the takeaway from a new report by the Institute of Medicine (IOM), which estimates that the country loses some $750 billion annually to medical fraud, inefficiencies, and other siphons in the health-care system. In comparison, the Defense Department budgeted $757.8 billion for the war in Iraq over the eight years it was there.
The IOM's analysis acknowledges a little bit of overlap among the categories, so it altogether adds up to slightly more than $750 billion:
More than 18 months in the making, the report identified six major areas of waste: unnecessary services ($210 billion annually); inefficient delivery of care ($130 billion); excess administrative costs ($190 billion); inflated prices ($105 billion); prevention failures ($55 billion), and fraud ($75 billion). Adjusting for some overlap among the categories, the panel settled on an estimate of $750 billion.
By far the biggest black hole when it comes to waste has to do with how we practice medicine -- over half of it is accounted for by unnecessary services, inefficient care, or the failure to prevent problems that require expensive intervention.
The report underscores how much we could save just by encouraging doctors to order fewer procedures and, on the patient side, by taking a more active interest in lifestyle monitoring. The IOM offers a few specific examples:
- Patients don't need to get more than one colonoscopy every 10 years.
- If you had a fainting spell but it didn't come with a seizure, you can safely forego a $2,000 MRI.
- Avoiding expensive imaging studies for early complaints of back pain.
Industry giants are already moving beginning to catch on to these ideas on their own, even independently of the Affordable Care Act, so chances are looking good that we'll soon cut down on at least some of these inefficiencies and wastes.
http://www.theatlantic.com/health/archi ... ly/262106/
Thanos @ Mon Sep 10, 2012 3:04 pm
"Unnecessary services" is the way that doctors and hospitals cover themselves to avoid frivolous lawsuits that accuse them of not doing enough testing when a patient gets ill. Ram through some serious tort reform in the US that punishes the epidemic of crooked lawsuits and the costs of everything, especially in health care and insurance, will go down.
Never happen though. Americans love suing everything under the sun. They'll bring in serious gun control in all the Red States long before they ever do anything about greed-driven lawsuits.
Robair @ Mon Sep 10, 2012 3:09 pm
You get what you pay for.
Americans are paying for lawyers and insurance companies. So that's what they get.
BeaverFever @ Mon Sep 10, 2012 3:10 pm
Thanos Thanos:
"Unnecessary services" is the way that doctors and hospitals cover themselves to avoid frivolous lawsuits that accuse them of not doing enough testing when a patient gets ill. Ram through some serious tort reform in the US that punishes the epidemic of crooked lawsuits and the costs of everything, especially in health care and insurance, will go down.
Never happen though. Americans love suing everything under the sun. They'll bring in serious gun control in all the Red States long before they ever do anything about greed-driven lawsuits.
Never happen though. Americans love suing everything under the sun. They'll bring in serious gun control in all the Red States long before they ever do anything about greed-driven lawsuits.
Well that might be part of the reason, but the main reason is simple: If they can get away with billing your insurance for it then they're going to do it. There is an entire floor of the hospital that is nothing but billing clerks and claims specialists. Halleluja, it's a miracle how many US patients are found fit for discharge the very same day they hit their insurance max!
andyt @ Tue Sep 11, 2012 9:15 am
We can't pat ourselves on the back, we have those inefficiencies too. The reason our healthcare costs so much less is primarily due to less administrative costs for a single payer system, rationing of healthcare and that we don't have a huge military that needs a lot of expensive care. Also, our people are a bit healthier than Americans, and we do preventive care better because people don't hesitate to go to the doctor here for smaller stuff, which, as the OP points out, can prevent the bigger stuff. This last is something to think about for people who are in favor of user fees for Canada.
BartSimpson @ Tue Sep 11, 2012 9:26 am
Ever since Obamacare passed it's been one 'study' after another saying how routine physicals, mammograms, and etc. are all 'not necessary'.
Looks to me like the idea of prevention and intervention is going to give way to hoping that people just die before they incur any costs for the new government-run medical system.
herbie @ Tue Sep 11, 2012 9:06 pm
Wouldn't have anything to do with TV ads convincing people they need an MRI for a runny nose, or doctors who get kickbacks for referring people to the MRI clinic would it?
And no Bart. Only in America would people equate cost efficiency to something like that. Even Soviet Union didn't and North Korea doesn't.
carolgreen616 @ Wed Sep 12, 2012 5:54 pm
They'll bring in serious gun control in all the Red States long before they ever do anything about greed-driven lawsuits.
Xort @ Wed Sep 12, 2012 6:23 pm
Thanos Thanos:
Ram through some serious tort reform in the US that punishes the epidemic of crooked lawsuits and the costs of everything, especially in health care and insurance, will go down.
Tort reform might be better served by tort replacement.
Most of the tort reform platform runs on the idea of capping damage that can be paid out. That's silly because it does nothing to help the injured person if they are hurt about the legal max or correct the source of harm.
I'd suggest replacing the whole medical insurance and it's attachment to the legal system which something like most Canadian provinces have for on the job injuries.
All medical service providers must pay into a health insurance fund, the amount paid is based only on the projected payouts and the providers work load indexed to risk the of service offered.
In exchange people have no legal ability to seek damages from providers. They are however covered for all harm by the fund, which operates under a shall facilitate mandate.
The providers of services are however subject to inspection, review, correction and punishment by the insurance fund. No longer are private trade orginizations the body that corrects the medical professions for their malpractice or negligence.
Studies into US malpractice found that a very small minority of health care providers causes the large majority of malpractice claims. It also found that medical insurance rates change mostly due to the yields of investments, or to abstract it even more to the rise and fall of the stock markets.
Which is to be expect of an insurance industry that uses premiums to make money on investments rather than a simple money in money out plus our take operation.
~
But as you said Thanos the US is never going to accept a government body to regulate their medical system, or a government operated insurance system.
So the US can keep paying double what everyone else does for health care.
MeganC @ Wed Sep 12, 2012 7:58 pm
herbie herbie:
Wouldn't have anything to do with TV ads convincing people they need an MRI for a runny nose, or doctors who get kickbacks for referring people to the MRI clinic would it?
And no Bart. Only in America would people equate cost efficiency to something like that. Even Soviet Union didn't and North Korea doesn't.
And no Bart. Only in America would people equate cost efficiency to something like that. Even Soviet Union didn't and North Korea doesn't.
North Korea doesn't even have FOOD so WTF are you talking about?
Lemmy @ Wed Sep 12, 2012 8:09 pm
Tort reform is a bullshit fallacy. There's no epidemic of frivolous law suits. Jackpot Justice is a term coined by insurance companies and physicians' associations to rally support. Tort reform (what a joke that phrase is) just drives up taxes. Tort reform allows private citizens and corporations, who should be paying for the damages they do, slough the whole thing off on the public. Some doctor fucks up, makes your a kid a retard for life, who pays if the doctor can't be sued? The taxpayer. That brain-damaged kid is now a burden on the state. No wonder doctors want tort reform.
If you haven't seen Hot Coffee, you should.
MeganC @ Wed Sep 12, 2012 8:11 pm
So you support making lawyers rich?
Lemmy @ Wed Sep 12, 2012 8:12 pm
Watch the film then get back to me.