A Thompson Reuters Study:
Proposed reforms could be paid for by fixing inefficiencies, report claims
WASHINGTON - The U.S. health care system is just as wasteful as President Barack Obama says it is, and proposed reforms could be paid for by fixing some of the most obvious inefficiencies, preventing mistakes and fighting fraud, according to a Thomson Reuters report released on Monday. The U.S. health care system wastes between $505 billion and $850 billion every year, the report from Robert Kelley, vice president of health care analytics at Thomson Reuters, found.
"America's health care system is indeed hemorrhaging billions of dollars, and the opportunities to slow the fiscal bleeding are substantial," the report reads. "The bad news is that an estimated $700 billion is wasted annually. That's one-third of the nation's health care bill," Kelley said in a statement....
One example — a paper-based system that discourages sharing of medical records accounts for 6 percent of annual overspending. "It is waste when caregivers duplicate tests because results recorded in a patient's record with one provider are not available to another or when medical staff provides inappropriate treatment because relevant history of previous treatment cannot be accessed," the report reads.
Some other findings in the report from Thomson Reuters, the parent company of Reuters:
- Unnecessary care such as the overuse of antibiotics and lab tests to protect against malpractice exposure makes up 37 percent of health care waste or $200 to $300 billion a year.
- Fraud makes up 22 percent of health care waste, or up to $200 billion a year in fraudulent Medicare claims, kickbacks for referrals for unnecessary services and other scams.
- Administrative inefficiency and redundant paperwork account for 18 percent of health care waste.
- Medical mistakes account for $50 billion to $100 billion in unnecessary spending each year, or 11 percent of the total.
- Preventable conditions such as uncontrolled diabetes cost $30 billion to $50 billion a year.
"The average U.S. hospital spends one-quarter of its budget on billing and administration, nearly twice the average in Canada," reads the report, citing dozens of other research papers...
--Reuters, msnbc.com (10.26.09)
They may appear as low-hanging opportunities ready for the picking. But they are not. If they were that easy to address, they'd have been remedied a long time ago. There are entrenched financial interests and structural barriers that protect them. Each will be as much a political battle as any other healthcare policy or significant administrative change. And so, while these opportunities are well known and an adjunct part of the healthcare reform dialogue, initiatives to address them are not part of any healthcare legislation. First things first is the reality. It is proving difficult enough to pass any kind of healthcare reform, however desperately needed and however short of meeting the actual need. Further wrangling and wrestling over necessary, related healthcare cost reduction measures will have to wait for another day--or else nothing at all will be passed. For all have finally learned: this is an incremental process, and if it is to achieve anything, it must proceed one digestible, workable step at a time.
Some friends and others concerned about the stand-alone financial integrity of healthcare reform legislation argue that any cost reduction possibilities to be later addressed should not be counted as savings related to the reform legislation--now or then. I understand the arguments, the logic. Whatever healthcare plan that is passed cannot now deal directly with solving these problems, and so any benefit from separate efforts to solve them should not be counted to reduce the net cost of a new healthcare plan. After all, if we had only taken the initiative, we could have addressed some of those problems and achieved the cost savings earlier. But, then, might not the cost of today's healthcare bill be considerably less in some areas? Many of the issues are directly or indirectly related.
Regardless, the adjunct discussion of these opportunities, the evolving understandings of the absolute need to reduce these costs, will provide the impetus and incentive to next address these problems and opportunities in a way that did not exist before. Surely that much is true, isn't it? And I don't personally care how they format the benefits of the sum total of expenses and savings associated with healthcare or healthcare reform--that associated directly with the legislation, or that which follows indirectly but necessarily from it. The bottom line effectiveness and efficiency for the whole healthcare system is all that really matters, isn't it?
When new healthcare reform legislation is passed--whatever is passed--cost containment and reduction efforts will surely move to the front burner, won't it? Won't it be on the minds of healthcare providers, and federal and state governments alike--and the likely subject of future regulatory or legislative initiatives? Budget-conscious Republicans, Blue Dog Democrats, even progressive Democrats, will have to find common cause in the effort to rationalize the newly reformed health care system so that it is socially and financially accountable, and operationally efficient by standards of international best practices. It will happen. It will have to. But as already conceded, it will take time and will not be easy.
Walk through each of the identified problems or opportunities in the article excerpt, above. Take out a piece of paper, and next to each item list parties with important financial, ideological or political interest, and how critical it is to their continuing financial viability or power to maintain the status quo. List the structural, organizational and political barriers (including those representing the financial interests), legal and regulatory barriers, capital cost barriers, management and resistance-to-change barriers (regardless of the benefit to be achieved). Then, list the steps that would have to be taken to overcome them. It's all very daunting and tiring, and without a strong popular mandate, legislative will and initiative, and the leadership of the executive branch--the President--it's all a twisted, rocky road over a steep hill.
But it can be done, and it likely will be--at least to some extent. All responsible observers agree that it must be. And examples of many such successes already exist on a smaller scale at one hospital or another, in one medical system or another, somewhere. Take the challenge of a common computer system with all healthcare records. Many hospital systems already have that. The blueprint is there, and the savings are large. It should be a "no-brainer."
But then there is the indefensible, ethically inexplicable genuflecting of the Democrats before the American Trial Lawyers Association. The failure of tort reform in this country constitutes unwarranted support and subsidization of a shameless level of plaintiff's counsel compensation through unlimited contingent fees in medical malpractice suits. It raises to daunting levels the cost of medical malpractice insurance, and is a proven incentive for doctors, hospitals and other healthcare providers to maximize testing and procedures--often unnecessarily--to avoid any possible argument of negligence. The cost to the practice of medicine, as noted in the article above, has been far too great to justify. Reasonable, legal limitations on jury awards, and legally protected standards of medical practice have to be legislated and regulated. Why won't the Democrats--even at a time when cost containment is so critical to their legislative agenda--fail to do what is right and necessary? And what of President Obama? He, most of all, was supposed to be above such things. I'm an Obama fan, as most of you know, but he's been a disappointment on this issue.
So many of these cost-saving initiatives are financially necessary and ethically important to an effective, efficient healthcare system. Regrettably, as easy as they are to articulate and agree with, they nevertheless remain difficult to hold for long in the cleansing sunlight of social, financial and political accountability. But while a season of accountability and reform is still upon us, our public support must remain high and demanding. The government's political will must be buttressed, held firm, and energized by the strong, determination of healthcare consumers--we, the American people, all of us.
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