How To Eliminate Waste In U.S. Health Care

Most people have a suspicion that a significant portion of healthcare costs in America are wasted. Now, a new report from Thomson Reuters has proven them right. Almost one-third of medical expenditures each year, up to $850 million, is wasted on things such as unnecessary care, disorganized paperwork, and fraud. Reducing these costs would have a significant impact on the cost of health insurance. There are fewer primary care physicians who must fill out more paperwork and hire more clerical help; this is in contrast to most other industrialized nations. The report found several ways to reduce wasteful spending on healthcare:

• Reduce repetitive paperwork and other inefficiencies by switching over to electronic records. Keeping records electronically through services like Google Health will make it easier to share patients' medical history between physicians and specialists, therefore avoiding overspending on inappropriate treatments or duplicate tests. The current paper-based system needs to evolve with the times.
• Do more to combat health insurance fraud. Nearly a quarter of wasted health care costs is spent on scams like referral kickbacks and Medicare fraud. Increased funding for enforcement of existing fraud regulations would be a good investment in the long run.
• Enact medical malpractice reform as soon as possible. While there are certainly instances in which negligence on the part of doctors and hospitals results in tragic circumstances that need to be compensated for, some trial lawyers have gone too far in an attempt to protect patients. Fearing the prospect of paying out millions of dollars in judgments, physicians often order unneeded lab tests and over-prescribe antibiotics. One might say it's better to be safe than sorry, but their caution has cost our healthcare system up to $300 billion per year.
• Practice more preventative medicine. Millions of Americans suffer from preventable diseases that, in total, cost billions to treat. If chronic conditions like diabetes were caught early and avoided through lifestyle changes, it would save $30-$50 billion yearly.
• Require more and better training for doctors and other medical professionals. 11% of wasted health care spending is on medical mistakes. Insurers have to pay twice for a single procedure in order to fix those mistakes. If doctors did their job better the first time, these costs would be reduced.

These recommendations should be included in the healthcare reform bill going through Congress, as they would surely result in lower costs for any health insurance plan. Supporters of a public option could also use these suggestions as a road map to finding the money to cover such a program. Other countries with a similar government-run insurance program already follow similar strategies. Eliminating waste in the health care system would go a long way towards paying for the projected $1 trillion cost of the comprehensive reform bill, although it would also be beneficial for private insurers' profit margins. However, these changes will probably see resistance from those individuals and groups accustomed to the status quo.

(Image: Alarzy under CC 2.0)