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STUDY SEES HUGE SAVINGS

US Health Care Wastes $700B a Year

A third of spending is lost to pointless treatment, paperwork, fraud

By Jason Farago| Posted Oct 26, 09 5:53 AM CDT|

(Newser) – A study by Thomson Reuters released today confirms President Obama's contention that the American health care system is hemorrhaging billions of dollars a year, with one-third of the cost of care wasted on inefficiency, mistakes, and fraud. The report, which cites dozens of research papers, finds that about $700 billion is misspent each year, 37% of which is attributed to overuse of antibiotics and tests to avoid malpractice exposure.

Another 22% of waste is sucked up by kickbacks, fraudulent Medicare claims, or other scams. Inefficiencies, such as a paper-based records system, account for 18% of the waste, and medical mistakes 11%. "The opportunities to slow the fiscal bleeding are substantial," said the head researcher. "We can reduce health care costs without adversely affecting the quality of care or access to care."

Dr. Pedro Jose Greer examines Medicaid patient Kenneth Caldwell, 50, in his office at Mercy Hospital in Miami. (AP Photo/Lynne Sladky)

A family nurse practitioner at the University of Southern Maine examines a patient. (AP Photo/Pat Wellenbach)

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40 comments

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SilenceDogood
Oct 26, 09 6:27 AM CDT

Let’s discuss this. The 37% number mentioned above is a ridiculous generalization. To include test to diagnose issues that once found may or may not have required the entire series of tests is the basis of this argument. It might be helpful to remind everyone that this medical industry has evolved into a dance between caregivers attempting to do their job and the malpractice profession that is awaiting a physician to make either a credible mistake or a slight miscalculation of his art. The reason physicians take additional steps to reduce their legal exposure is the same reason this fool wrote this article, it’s a lack of tort reform. Our President Obama promised he would reach across the isle and specifically mentioned tort reform in his address to the nation. Is it not odd that after listening to weeks of debate on where the money for Obamacare is coming from, no one has mentioned the cost savings of tort reform that conservatively they would be 15% of all current health care cost if the reforms were properly executed? Supporters of England’s and the Canadian health care system are careful not to mention that ambulance chasers are amazingly rare in those two nations, an interesting omission of necessary information. Reply

-5

IN RESPONSE:

northeast
Oct 26, 09 7:12 AM CDT

Obama doesn't want to fight the trial lawyers on tort reform, he just wants a bill passed....and if that means the bill is an ineffective mess, that's a political step he's willing to take. If someone feels that I've treated the President unfairly with this assessment, you'll need to explain why he's studiously ignored the issue of universally practiced 'defensive' medicine leading to over-treatment.

IN RESPONSE:

RockyPneumonia
Oct 26, 09 7:56 AM CDT

Something cannot be a "generalization" if it's as specific as this. You really should learn what words mean before you use them. ...And to claim that President Obama has not crossed the aisle (another word you should learn) in a meaningful attempt at cooperation, when he's repeatedly held out the hand of bipartisanship only to have it slapped away, is absurd.

+12

IN RESPONSE:

paul123
Oct 26, 09 9:18 AM CDT

Well, the numbers do seem very inflated. I would be very much interested in seeing their sample size, and would also be interested in seeing how this study was actually conducted. 37% of waste was attributed to antibiotic and unnecessary lab tests. The one big question is, how can we be absolutely sure that 100% of these antibiotics and lab tests were indeed unnecessary? We cannot in my opinion. Lets just focus on the antibiotics for a moment. I don't know of one physician, myself included, that will prescribe an antibiotic just on a lark. They are either given for an obvious infection, or when a patient has been in or is going to be in a situation where they are at an increased risk to contract an infection. On to the next 22%, there is not doubt that fraud is committed, and that is unfortunate. However, included in this 22% is kickbacks? I've been a physician for almost 15 years, and unless I'm doing it wrong, I have yet to see or hear anything about this. Nobody or company is paying me for referrals or vice-versa, and if they were, it would be under the table, and you surely couldn't bill an insurance company for that. As far as redundant paperwork, it exists no doubt, mostly on the behalf of the insurance companies themselves. Sending claims has gone electronic over the past 5 years or so, and that has cut down on cost quite a bit. I will end with a word on the "preventable" condition of uncontrolled diabetes. I've seen hundreds of thousands of diabetic patients over the years. Some of these people take care of themselves, and some don't. Those that don't usually but not always are apathetic as opposed to unable to help themselves. That said, no amount of public awareness or education is going to correct 100% of uncontrolled diabetes. Some people just don't care or are in denial or both, and as a consequence just get worse. Now, as it has been discussed, Obama HAS crossed the isle in an attempt at bipartisanship, but to say my way or the highway, is really not a genuine attempt. I'm not complaining, I mean the guy is in office and I really don't blame him. Just don't complain when a republican pres is in office one day and does the same.

IN RESPONSE:

DontLikeYou
Oct 26, 09 9:19 AM CDT

The US government wastes about $1 trillion per year. Marry healthcare with government and imagine the financial fiasco that will result.

-1

IN RESPONSE:

IndependentThinker
Oct 26, 09 10:29 AM CDT

@paul123: I have gone into the urgent care many times with a sore throat I figured was strep. They would swab me, do a rapid strep test that would come up negative yet they would still give me antibiotics "just-in-case". I am sure I am not the only one, and it has happened to me multiple times.

IN RESPONSE:

paul123
Oct 26, 09 10:42 AM CDT

Fair enough Thinker, but there is no way of telling at the time that the culture is taken if it will come up positive or negative. I'm glad that it has always come up negative for you. The fact that you received antibiotics as a precautionary measure is a reasonable and smart thing to do, especially when even without insurance, you can get a round of antibiotics for approx 15 dollars out of pocket, at no cost to the insurance company. (Keflex and Amoxacillin comes to mind) Imagine how much people would fuss, and imagine the lawsuits that would come if people like yourself went, didn't get a test or antibiotics. Then when the patient got worse and died and the family sued and the attorney asks why wasn't a culture taken or why were antibiotics not given as a precautionary measure, the doctor would be in a bad place. Don't get me wrong here... I'm not saying docs do this just to cover their a$$, what I am saying is that the you and others like received the proper care and the standard of care, and any less would be simply negligent.

IN RESPONSE:

I_hate_to_say
Oct 27, 09 1:06 AM CDT

Fine, SDG. If we can have a national health care program like Britain's or single-payer health insurance like Canada, I'll gladly settle for a system of government tribunals to assess damages resulting from negligent healthcare delivery by providers (doctors & hospitals.) But obviously, if a family loses its breadwinner due to medical malpractice, there must be a system for compensating them for the loss.

IN RESPONSE:

NewserScooter
Oct 27, 09 1:21 AM CDT

I can't believe anyone would give you a down thumb on this very clear point. Thank you for being relevant.

| 0 minutes ago

divetrader
Oct 26, 09 7:27 AM CDT

I would say that the 22% going to kickbacks is a very significant number too. Aside from politicians, what other industry can get away with this? Reply

IN RESPONSE:

SilenceDogood
Oct 26, 09 7:45 AM CDT

This is hearsay; it is nothing more than nonsense aimed at persuading the uninformed. A claim that there are 22% in kickbacks is an easy way for Right Wingers to demonize businesses again without any substantiation. The entire concept is ludicrous. People claim that Fox is not newsworthy, what about this manure?

-6

IN RESPONSE:

RockyPneumonia
Oct 26, 09 8:20 AM CDT

Again, you really shouldn't use words, Silence, that you don't understand. The result of an exhaustive survey which which "cites dozens of research papers" may or may not be accurate, but it's certainly not hearsay.

IN RESPONSE:

Dr.Y.Dino
Oct 26, 09 9:13 AM CDT

So the solution to $145 in MediCare fraud is to massively expand the program?!?!?! Why not address the fraud BEFORE it is expanded to most Americans??

IN RESPONSE:

NewserScooter
Oct 27, 09 1:22 AM CDT

Congress !

| 0 minutes ago

Doctor_Supercilious
Oct 26, 09 7:57 AM CDT

We already know our system sucks. We pay more per person than any other oecd country on the planet while leaving 45 million of our populace uninsured. This report just points out the ugly details. Plugging our ears and screaming "LALALALA I CAN'T HEAR YOU" isn't going to make things better. Reply

IN RESPONSE:

DJM420
Oct 26, 09 8:12 AM CDT

im still wondering why conservatives do not want to change anything...there must be right-wingers who've lost their savings on medical care, only to have their liver transplant refused because they had a splinter removed 20 years ago... yeah, tort reform will solve THAT problem..(sarcasm people, sarcasm)

IN RESPONSE:

Dr.Y.Dino
Oct 26, 09 9:25 AM CDT

And how much do other countries on the planet pay for lawyers that do not contribute anything to medical care??? I'd much rather eliminate multi-million dollar awards to lawyers (e.g. John Edwards), than worry about the hourly rate of a good surgeon. Why punish the surgeon and continue to reward the lawyer???????????

IN RESPONSE:

paul123
Oct 26, 09 9:25 AM CDT

DJM, the system needs to be fixed, no doubt, but you don't fix a broken window with a hammer either. I'm sure that there ARE right wingers who have "lost" (spent is a much better word) a substantial amount of money on health care. The difference is that regardless of the outcome, good or bad, we feel that it isn't up to the government to suckle us like Romulus and Remus. If it was a good outcome, well then "yay" for the doctors! If not, well, then if the doctors did all that they could then still I say "yay" for the doctors. If not, hello lawsuit!

IN RESPONSE:

vwright1
Oct 26, 09 9:28 AM CDT

Cites dozens of studies...that gets my attention. Check it out.

IN RESPONSE:

Dr.Y.Dino
Oct 26, 09 10:18 AM CDT

How many other countries require their doctors and hospitals to provide care without payment??????? Florida example: http://www.youtube.com/watch?v=KjPBtfpn8wI

IN RESPONSE:

thejoint00
Oct 26, 09 7:25 PM CDT

during a recent doctor re assignment, my wife threw her back out and had to wait 45 days for a new patient appointment to open up, or go to the emergency room. we want less people in the ER not more, but then again, I guess coverages lapses are just part of being in the military.

IN RESPONSE:

NewserScooter
Oct 27, 09 9:33 AM CDT

So now its 45 million. When are you going to say its a 100 million. You know a 1/3 of those are illegal aliens, and at least a 1/3 if not more choose not to be insured be cause of their low risk. Now you want to force them "at the point of a gun" to buy something they did not want. What does not make you? Generous or a tyrant?

-1

IN RESPONSE:

Doctor_Supercilious
Oct 27, 09 10:50 AM CDT

So when an illegal goes to the hospital it's a good thing we don't have to pay for it. Oh wait we do. Darn.

| 0 minutes ago

odowd80
Oct 26, 09 8:15 AM CDT

The medical sector of the economy is an inefficient, wasteful mess because we've allowed it to be. They raise prices at will whenever they need bigger budgets and we pay because we want to continue living. Prices for medical serviced must be regulated by government for this reason. The price for heart surgery is not the same as the price for a jar of peanut butter. I can simply not buy a jar of peanut butter, or I can shop around for a better price. But, if I have a heart attack, I need surgery at the nearest possible location or I die. That's why the "free market" competition model pushed by the GOP doesn't work as well for medicine. The government must force down the costs of medicine to force hospitals to get their shit together. Doctors and specialists will have to take pay cuts. Their salaries can't keep growing at while everyone else's is falling, its just not sustainable. Reply

IN RESPONSE:

LovinLife
Oct 26, 09 12:00 PM CDT

Exactly! Healthcare should not be a privilege afforded only to the wealthy. Thanks Odowd.

IN RESPONSE:

NewserScooter
Oct 27, 09 1:24 AM CDT

What doc do you know who's salary is "growing"? I know plenty who are having cost increases for Malpractice ins. Health ins. employment costs, rent, lease rates, TAXES, and this year a nice 20-40% cut from Medicare? What world are you referring too?

| 0 minutes ago

cornelison
Oct 26, 09 8:47 AM CDT

Since I'm not part of your health care I do have questions. Is there a standard form that all health insurance companies use? Or is there a maze of paperwork different for each? When Americans lose their health care plan are they lining up at the emergency wards in the hospitals? Do they die in the hospital needlessly when treatment would have helped them live? Just wondering. Reply

IN RESPONSE:

RockyPneumonia
Oct 26, 09 9:14 AM CDT

No. Yes. Yes. Yes.

IN RESPONSE:

paul123
Oct 26, 09 10:08 AM CDT

No; Yes; No, the uninsured don't just all go to the ER. They go to the doctor's office too, and believe me they pay, even though they don't have insurance. Sometimes they pay in full, sometimes they pay at a reduced rate as agreed upon by the doctor, sometimes a payment plan is set up, or sometimes they are seen gratis; If they are IN the hospital, then they are actually receiving some treatment. People are not just falling like flies if that is what you are getting at.

IN RESPONSE:

cornelison
Oct 26, 09 3:52 PM CDT

Hi Paul. Over the years I've picked up on what happens to people who have no health insurance. Govt. tells them that they can't afford to cover them. They're made to believe that they're a burden on society so they wait until they can no longer wait. If they had insurance they might have better been able to get better. There's a psychological toll to those who cannot afford insurance in the first place. Having said that, the best information you'll get is from those who have suffered from a lack of health insurance.

| 0 minutes ago

Dr.Y.Dino
Oct 26, 09 9:32 AM CDT

Ask yourself, would you rather our countries best and brightest students go to medical school or law school????? Obama and Congress are voting for law school, because they want to keep our absurd tort system and lower doctor's earnings!! How STUPID is that????????????? Reply

IN RESPONSE:

Galileo
Oct 26, 09 11:47 AM CDT

It's a little more complicated than that.

IN RESPONSE:

LovinLife
Oct 26, 09 11:56 AM CDT

What a narrow view you have. Our President wants to get more doctors into general practice since so many of them are now in specialized medicine. It makes a lot of sense if you take the time to study the issue. Kathleen Sibelius is working hard on tort reform and we will have some kind of malpractice limits as soon as we find a way to balance that with patient protection. Get the facts if you care to be more enlightened at healthreform.gov.

IN RESPONSE:

RockyPneumonia
Oct 26, 09 1:10 PM CDT

Stop it, LovinLife; you know how facts confuse them.

IN RESPONSE:

Doctor_Supercilious
Oct 26, 09 1:36 PM CDT

Facts are their kryptonite.

IN RESPONSE:

paul123
Oct 26, 09 2:56 PM CDT

logic and reason are the dnc's

-1

IN RESPONSE:

Doctor_Supercilious
Oct 26, 09 9:48 PM CDT

Show me some. I'm still waiting.

IN RESPONSE:

RobN
Oct 26, 09 10:17 PM CDT

While I tend to agree with your general point, Dino, when I went to law school most of my friends chose it over med school not because of money but because we sucked at math and science.

| 0 minutes ago

CaptainZ64
Oct 26, 09 9:30 PM CDT

@RockyPneumonia: You crawled a poster over their use of words, very brave of you. How about backing your uninformative diatribe with facts? Reply

IN RESPONSE:

I_hate_to_say
Oct 27, 09 1:16 AM CDT

SilenceDogood is perfectly capable of defending itself. How about adding something here other than personal attacks that contribute nothing to the discussion?

| 0 minutes ago

View all 40 comments »

health care • health care costs • Medicare • health care reform • malpractice

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x

US Health Care Wastes $700B a Year

A third of spending is lost to pointless treatment, paperwork, fraud

Obama Calls
GOP's Bluff
With Health
Care Summit

President thinks Republican ideas will look worse in the spotlight

Obama Calls GOP's Bluff With Health Care Summit

President thinks Republican ideas will look worse in the spotlight

Obama Will Host
Bipartisan
Health Care
Talks—on TV

GOP, Dem leaders to hash out reform with president

Obama Will Host Bipartisan Health Care Talks—on TV

GOP, Dem leaders to hash out reform with president

Health Care Costs Hit All-Time High

And the government
will soon be paying
50% of them

Health Care Costs Hit All-Time High

And the government will soon be paying 50% of them

health care • health care costs • Medicare • health care reform • malpractice

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x

US Health Care Wastes $700B a Year

A third of spending is lost to pointless treatment, paperwork, fraud

Related Newser Stories

Analysis

Obama Calls GOP's Bluff With Health Care Summit

President thinks Republican ideas will look worse in the spotlight

Obama Calls GOP's Bluff With Health Care Summit

President thinks Republican ideas will look worse in the spotlight

Obama Will Host Bipartisan Health Care Talks—on TV

GOP, Dem leaders to hash out reform with president

Obama Will Host Bipartisan Health Care Talks—on TV

GOP, Dem leaders to hash out reform with president

Health Care Costs Hit All-Time High

And the government will soon be paying 50% of them

Health Care Costs Hit All-Time High

And the government will soon be paying 50% of them

health care • health care costs • Medicare • health care reform • malpractice

MOST POPULAR STORIES

[ By Views ]

[ By Comments ]

from our news partners

Just For Laughs

Associated Press

About

Help

Tools

Site Maps

What is Newser?

Obama Calls
GOP's Bluff
With Health
Care Summit

Obama Will Host
Bipartisan
Health Care
Talks—on TV

And the government
will soon be paying
50% of them