Experts See Opportunity in Recent IOM Report on Health Care Spending
Several health care policy experts say an Institute of Medicine report released last week -- which outlined wasteful spending in the U.S. health care system -- is an effective resource in the ongoing efforts to cut costs and raise the quality of care, the New York Times reports (Lowrey, New York Times, 9/11).
According to the report, about 30% of health spending in 2009, or about $750 billion, was wasted on unnecessary services, excessive administrative costs, fraud and other problems. In addition, about 75,000 patient deaths could have been prevented in 2005 if every state had delivered health care at the quality level of the best-performing state, according to one estimate (California Healthline, 9/7).
The report also found that of the total money wasted:
- $210 billion was spent on unnecessary care, such as duplicated tests;
- $190 billion on unnecessary administrative costs;
- $130 billion on inefficient delivery of services, such as screenings that were performed in hospitals instead of outpatient centers;
- $75 billion on fraud; and
- $55 billion on missed prevention opportunities.
Mark Smith -- president of the California HealthCare Foundation and chair of the 18-member panel that prepared the report -- said the report's purpose is to highlight that "Americans should expect to get and should demand to get better value for their health care dollar."
David Cutler, a health economist at Harvard University, said, "That money [$750 billion] is not only not buying anything, [i]t is actually a sign of poor care," adding, "A lot of cost reductions, if we do them the right way, would mean improved health, not worse health."
The IOM report also highlighted several cost-saving initiatives that some health care providers have adopted that prevent repeat hospitalizations, improve their record systems and eliminate ineffective treatments, the Times reports.
Wendy Everett -- president of the New England Healthcare Institute -- said, "We're starting to see some very early results" and added that she expects more best practices to be adopted with the full implementation of the Affordable Care Act and future changes to Medicare and Medicaid. Within 10 years, providers that are being paid for quality care will be "the norm," she suggested (New York Times, 9/11).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.