Report: Some U.S. health care spending 'squandered'

Aug 11 2009

Two news reports examine the the high costs of health care and assertions that much of the spending can be avoided: 

CNN Money details a recent report from the accounting firm PricewaterhouseCoopers' Health Research Institute that found $1.2 trillion, or more than half of the $2.2 trillion the United States spends on health care each year, is wasted: "What counts as waste? The report identified 16 different areas in which health care dollars are squandered. But in talking to doctors, nurses, hospital groups and patient advocacy groups, six areas totaling nearly $500 billion stood out as issues to be dealt with in the health care reform debate." According to the report, one of the biggest contributors to the wasted  dollars is when doctors order tests or procedures based not on medical need but on liability concerns.

CNN Money also identified inefficient claims process, overuse of the ER, medical errors and hospital readmissions as significant wasteful costs. "Other areas of waste identified in the PricewaterhouseCoopers report included up to $493 billion related to risky behavior such as smoking, obesity and alcohol abuse, $21 billion in staffing turnover, $4 billion in prescriptions written on paper, and $1 billion in the over-prescribing of antibiotics" (Kavilanz, 8/10).

Milwaukee Journal Sentinel reports on the imaging costs and notes that debate on MRI payments are a hurdle for reform: "Patients and advocate groups gathered late last month in Washington, D.C., to warn that proposed cuts in what Medicare pays for MRI, CT scans and other advanced imaging services would devastate patient access, particularly in rural communities. The event was organized by the Access to Medical Imaging Coalition, a group backed by the major manufacturers of imaging equipment, including GE Healthcare. ... [The] Coalition, which includes cardiologists and radiologists, is just one of the myriad special interest groups that often oppose cuts in what Medicare pays for medical services. But it is a good example of one of the obstacles to health care reform and the challenge in slowing the growth in spending" (Boulton, 8/11).