$765 Billion Wasted Annually on Healthcare

June 20, 2014
Jeff Brown, MD

According to reports from various organizations, America is wasting roughly $765 billion annually on healthcare and doctors should take some of the blame, according to Jeff Brown, MD.

A recent AARP Bulletin amalgamated reports from the Institutes of Medicine and the Centers for Medicare and Medicaid Services to determine that America wastes $765 billion annually on healthcare.

To put that number in perspective, consider that our healthcare waste is apparently more than the entire Defense Budget (itself no paragon of efficiency). The final shock factor is that most of that goes directly to the feet of you and me: the doctor.

How about these details: AARP claims $130 billion of preventable errors, $120 billion in unnecessary services, “excessive” prices of $10 billion, and $55 billion for missed prevention opportunities—these are on us.

A whopping $190 billion is “wasted” on insurance and bureaucracy and, finally, our favorite category to pick on, $75 billion to fraud. These are someone else’s responsibility to fix, although as taxpayers and consumers, you know who will pay for the “fix.”

I am sure that knowledgeable people can pick holes in the amounts and the methodologies that derived them, but that’s beside the point. This is an irrational, immoral. and sometimes criminal wasting of our national heritage, on a gargantuan basis, to say nothing of the unnecessarily poor health outcomes that result from all of this fecklessness.

Sure, the system is full of poor communication, faulty and obsolete assumptions, and useless politicization. But you never read or hear much from pundits or, more tellingly, our medical leaders on how the practicing physicians of America are in the appropriate position to make the modifications in our daily practice to decimate the waste in money and effort we engage in while we could also significantly improving outcomes.

Some simple examples: the wholesale adoption by hospitals and doctors of proven checklists in the ICU/CCU/ERs to simply reduce preventable iatrogenic infections. How about improving our personal techniques and practice communications to patients to increase compliance with preventive practices and drug use? Every study I have seen shows gaps in our skills and/or priorities large that you could drive a truck through.

We all could reduce our rationalizations for gray situations in patient care that result in us ordering more testing and more referrals to allegedly do a better job—though that might not bear up under objective scrutiny under a best practice spotlight. We have all seen and done this.

I know, the average doctor is in a tight spot to routinely avoid pumping up our sagging bottom lines, cover our legal behinds, and try to always appear extra competent through always ordering more. If a doctor keeps doing more ordering for our patients, isn’t that evidence of greater competence and caring?

We all ought to have an inscribed paper weight on our desks that reminds us of the old saw that “the most expensive medical technology is our pen.” And it’s an extra burden on doctors to walk the ethical tightrope as long as we still are stuck with the now out-of-date fee-for-service system.

The proliferation of online doctor rating sites by consumers and by insurance companies, including Medicare, may force the issue by making our professional activities more transparent. Aside from the ubiquitous Yelp, there are now 50(!) or so sites in use with Healthgrades, RateMDs, and Vitals being the biggest. And one survey showed that 25% of adults are now consulting at least one site before engaging a physician. This number will only go up folks, and we better be prepared for more evaluation.

We know how difficult it is to define “quality” in medical practice, but our individual and collective economic activity is quite easy to monitor and the easiest track is the one that will be followed. Just look at the recent Medicare reports that were splashed all over the headlines showing how some of our colleagues have brought the attention of the authorities down upon them for billing in the multiple millions.

In the end, this kind of transparency will save many billions and improve health outcomes.