Cutting Health Care Waste Takes a Team
By Daniel R. Levinson, Inspector General,
Fraud and waste are the Bonnie and Clyde of American health care, robbing the system of money that would be far better spent making sick people well. Although fraud is the flashy attention-getter, it is waste layered throughout the system that is making off with the most money.
Unfortunately, waste is hard to find and even harder to fix, sometimes hiding in plain sight. The cumulative cost is staggering. Of the $2.5 trillion the United States spent on health care in 2009, an estimated $750 billion was wasted on medical errors, uncoordinated care, inflated prices, excessive testing and missed chances for preventive health care, according to Institute of Medicine data. That did little or nothing to make Americans healthier.
As inspector general, I direct an office that searches for waste and fraud in the 300 programs under the U.S. Department of Health and Human Services, primarily in Medicare and Medicaid, which together finance health care for more than 100 million Americans.
Last December my office released a study that shows Medicare and its beneficiaries paid more than four times the cost of the most commonly ordered lower-back brace. Medicare paid an average of $919 for a brace that cost suppliers an average of $191. The price was supposed to include fitting, yet in one-third of the claims, this was not provided. Ultimately, taxpayers paid $37 million more for these braces than suppliers paid to acquire them.
Adverse medical events such as infections and overmedication often waste health care dollars and, far more important, harm patients, including one of every four hospitalized Medicare patients. These events contribute to an estimated 180,000 deaths each year and cost Medicare more than $4.4 billion a year. Our research shows that nearly half of these events are preventable.
This is a complex problem. Permanent solutions require the help of lawmakers, medical professionals and patients - yes, patients.
There are promising signs. Medical education is beginning to respond to these issues. "At bottom, the key agents are the physicians. They order the tests, prescribe the drugs and recommend the surgeries," said Darrell G. Kirch, M.D., president of the Association of American Medical Colleges. More physicians are weighing the cost of brand-name drugs against generics and questioning the effectiveness of commonly ordered tests. The American Board of Internal Medicine Foundation and 375,000 doctors are developing the "Choosing Wisely" campaign with a list of overused tests and procedures that starts with stress tests for healthy people, bone scans for those under 60 and diagnostic tests for common allergies.
But patients have more power than they realize. Reducing waste starts with asking questions. Our most significant investigations started because someone asked a question. Patients can and should challenge questionable charges on their bills, even if their insurance pays for the care. They should ask about tests they don't understand, the cost of what's being recommended and whether less expensive alternatives are available.
In the end, it's a team effort. Reducing waste involves all of us.
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Priority recommendations summarized.
FY 2016 Work Plan
OIG projects planned for 2016.
Significant OIG activities in 6-month increments.