Another option is to cut health care spending. With the government recently reporting that health care expenditures reached $2.4 trillion last year and will nearly double by 2018, reining in runaway health care spending is every bit as critical as providing universal access. If health care is not affordable, providing access to the current system will only exacerbate the problem by driving up costs.
So the real question facing policymakers is how to cut costs wisely, and where to begin?
A good place to start is by rooting out what’s being wasted. How much waste is there? At least a full third of health care spending —- a staggering $800 billion annually —- qualifies as wasteful spending, meaning it could be eliminated outright without reducing the quality of care. That could mean as much as $19 billion in wasteful spending in Georgia alone.
For decades, there’s been much talk but little reliable research on the sources of waste in health care. What research there was focused on administrative inefficiencies such as claims processing and the under use of information technology.
But new data suggests that this narrow focus has missed a virtual “wasteland” in clinical care delivery. Research by the Massachusetts-based New England Healthcare Institute identifies, for the first time, the insidious effects of waste in clinical care. NEHI has pinpointed four major categories of waste with high potential for significant costs savings:
Wide variations in patterns of care: Lack of physician adherence to clinical practice guidelines has resulted in huge variations in patterns of medical care across the country. Surgery for coronary artery bypass or hip replacement, for instance, is performed more frequently in one area of the country than another. This inconsistency in care delivery reflects uncertainty among doctors about the right thing to do, resulting in the overuse and misuse of medical interventions. Greater adherence to practice guidelines would standardize care by eliminating these wasteful and costly procedures. Potential savings: $600 billion per year.
Medical mistakes: such as when surgery is done on the wrong organ, preventable medication errors are made, or avoidable infections are acquired in the hospital. Potential savings: $52.2 billion per year.
The overuse of hospital emergency departments for non-urgent care: for instance, when patients use the emergency department for minor acute illnesses because they don’t have access to a primary care physician. Potential savings: $32 billion per year.
The under use of drugs and other therapies: when we fail to manage chronic conditions like high blood pressure, diabetes and asthma, leading to acute episodes (asthma attacks, insulin shock) and hospitalization. Potential savings: $5.5 billion per year.
Concrete policy steps can be taken to recapture this $800 billion in lost annual spending. Hospitals, for instance, should be required to adopt Computerized Physician Order Entry —- a lifesaving technology that reduces costly medication errors —- as a condition of participation in Medicare. Community health centers should receive funding to establish case management programs and walk-in centers for non-urgent patients who might otherwise end up in the emergency department. Primary care should be reorganized to relieve the burden on providers and encourage more physicians to enter the field. And payment —- beginning with Medicare and Medicaid —- should be restructured to encourage the use of non face-to-face encounters such as e-visits and telemedicine.
Clearly, every $800 billion counts, and now that we know where the wasted dollars are in clinical care, we can no longer afford to let them go down the drain.
Wendy Everett is president of the New England Healthcare Institute in Cambridge, Mass.
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