United States Wastes $390B Annually on Outdated or Unnecessary Health Care, New Study Finds
About $390 billion a year is wasted on "outmoded and inefficient medical procedures," according to a study released today by a group representing large employers, the New York Times reports. The study, sponsored by the Midwest Business Group on Health, which includes businesses such as General Motors Corp. and Ford Motor Co., found that the typical employer pays about $1,700 to $2,000 per employee in "poor-quality health care costs," accounting for roughly one-third of total health care expenditures per employee last year. If current trends persist, the cost of inadequate care is predicted to exceed $1 trillion by 2011, the report said. The study was carried out by researchers at the Juran Institute using data from hospitals, health policy experts and published research. Excess costs were incurred as a result of the following:
- Overuse of surgical procedures, tests and medicines;
- Failure to provide routine flu and pneumonia vaccines for the general population or appropriate screening and follow-up treatments for heart disease and diabetes patients; and
- Inadequate screening for breast cancer, depression and sexually transmitted diseases.
The report found that the "vast majority" of American companies focus too heavily on the price of employee health care and not enough on the quality of health plans (Freudenheim, New York Times, 6/11). The study also determined that a "broad set of standard measurements or ratings systems" for employees to evaluate health plans does not exist (Japsen, Chicago Tribune, 6/11).
Employers should "get a lot more involved" in choosing the health plans they offer to their workers, Midwest Business Group on Health President Jim Mortimer said. Further, companies should encourage hospitals to use computerized drug-ordering systems to prevent errors, require doctors and health facilities to "set numerical targets" for reducing medical errors, "punish low-performing hospitals and medical plans" by withdrawing business and ask health providers to implement "continuous improvement" programs that would increase vaccination rates and standardize the treatment of common diseases, the report suggests (Landers, Wall Street Journal, 6/11). Health providers called the study's findings "overblown" and said they are working to improve and measure their quality of care. Carmela Coyle, the American Hospital Association's senior vice president for policy, said, "The study rightly points out some problems in U.S. health care, but it does draw an overly broad conclusion that is incorrect and possibly misleading" (Chicago Tribune, 6/11).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.