By Kate Leo
The United States is one of the biggest spenders on healthcare out of high-income nations (18% of our gross domestic product). Yet we perform the worst on health outcomes. In addition, health care costs are rising, making many needed services unaffordable. Why is all this? Although this is a loaded question, one of the reasons we might not be achieving maximum benefits from our spending is the amount of spending that is considered waste. It is estimated that 30% of US spending on healthcare is waste. Donald Berwick, the former administrator for Medicare and Medicaid, helps describe why waste is important to look at. He says that quality means matching efforts with outcomes, and therefore waste means performing tasks without it being helpful. Our healthcare system needs to ensure that resources are being used efficiently to help people. We need to maximize our spending, and we are not doing that currently with the amount of waste that has the potential to be reduced.
There are six categories of healthcare waste: failure of care delivery, failure of care coordination, overtreatment/low-value care, pricing failure, fraud and abuse, and administrative complexity. Failure of care delivery means that healthcare is not being as efficient as possible because best-known care practices are not used. An example is hospital-acquired conditions (HAC) where a patient obtains something like an infection that is due to being at the hospital, not from the initial issue, ultimately compromising patient safety. Failure of care coordination means that our healthcare system is fragmented. This causes unnecessary ED visits or readmissions after simple surgeries because patients aren’t being followed up properly. Overtreatment/low-value care means that patients may receive care that isn’t needed. For example, many patients receive end-of-life care that they don’t want or that won’t improve their outcome. Pricing failure means that prices are unnecessarily higher than the cost of production or value. This occurs because of the lack of price transparency and the competitive market within healthcare. Fraud and abuse mean illegal action in healthcare. For example, doctors may bill patients for services not provided. Finally, administrative complexity means that time is wasted due to unstandardized rules and procedures. For example, many doctors spend time on insurance claims that are tedious and complex instead of spending time with their patients.
Although interventions have been implemented in each category, it proves hard to fully reduce waste. With our healthcare system so fragmented, money is hard to track; those who produce waste may not be the ones who need to cut back in areas. Furthermore, with a fee-for-service model, any sort of service is revenue, not waste. Finally, politics always play a role in policy decisions; there will always be push-back when attempting to cut back programs. However, in order to improve the health outcomes of our people, we need to take a hard look at where our healthcare spending is going and really focus on long-term policy solutions to reduce it.
Sources: https://jamanetwork-com.libproxy.lib.unc.edu/journals/jama/fullarticle/2752664 https://edhub.ama-assn.org/jn-learning/video-player/17975385
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