The Institute of Medicine released a report in September that found 30 percent of all health care spending in the United States is wasted.
The report is a collaboration of research led by 18 professional clinicians, policy experts and business leaders. They said that the U.S. wasted an estimated $750 billion dollars in 2009 on health care, and the health care system that is currently in place lacks things like clarity and consumer-friendliness. According to the report, the wasted funds come from unnecessary services, excessive administrative costs, fraud and other problems.
The statistics show that the U.S. health care system in place has issues, some of which are big disputes in the 2012 presidential campaign. Medical waste is a national crisis, but its effects can be seen on a local level as well.
“Nationally, insurance may play a role,” said Liz Burns, director of student health services and one of four full-time nurse practitioners at Mary Walker Health Center at Oswego State. “Some insurances are specific to certain regions. When an individual accesses health care away from home and needs diagnostic testing the insurance company may not pay for outpatient services such as an X-ray or lab work. The insurance may only pay if an individual goes to an emergency room or urgent care. That is a longer wait for the patient and higher cost for care in an ER or urgent care.”
The report states that most payment systems emphasize volume over quality and value by reimbursing providers for individual procedures and tests rather than paying a flat rate or reimbursing based on patients’ outcomes.
“It’s just going to spiral on itself from a prescriptive standpoint,” said Eric Iosue of Kinney Drugs pharmacy in Oswego. “A lot of prescriptions that people leave in their hands with aren’t necessarily filled or taken properly, so that from our side of it certainly contributes to increasing costs in the health care field.”
According to The New York Times Co., the Institute of Medicine’s analysis of 2009 data shows $210 billion spent on unnecessary services like repeated tests, and $130 billion spent on inefficiently delivered services like a scan performed in a hospital rather than an outpatient center. In addition, the health care system wastes $75 billion a year on fraud, $55 billion on missed prevention opportunities and $190 billion on paperwork and unnecessary administrative costs.
The report said that some hospitals and care centers are not equipped with new technology that is available and beneficial and often medical errors or inefficiencies lead to financial and life wastes. The Institute of Medicine found that as many as 75,000 people who died in 2005 would have lived if they got the kind of care provided in the states with the best medical systems.
There are ways of transforming the U.S. health care system that can reduce spending. The report points out two main problems: the sudden overwhelming explosion in biomedical and clinical discoveries and the constant increase in cost of quality health care for Americans.
The report encourages doctors to work in teams and share information, make prices and costs transparent to consumers, reward doctors for outcomes and not procedures, ensure that all doctors use the best tested practices and identify and correct errors among them. The committee of the institute that created the report said that the ways that health care providers currently train, practice and learn new information could not keep up with new research discoveries and technological advances.
One of the worst parts of the system is that that health insurers, hospitals and health systems do not learn from their mistakes, according to the report.
“In the last few years, I’ve seen that the cost of medications keep going up and what people have to pay keeps going up and I think the system is going to fail here eventually,” Iosue said.