How To Save 30% of American Health Care Costs
The Salt Lake Tribune (http://www.sltrib.com/sltrib/world/54842066-68/care-health-report-medica...) and KSL News (http://www.ksl.com/index.php?nid=130&sid=22026938) are publishing an Associated Press article about yesterday's Institute of Medicine report (http://www.iom.edu/Reports/2012/Best-Care-at-Lower-Cost-The-Path-to-Cont...) which asserts that $750 billion and 75,000 lives per year could be saved if we had a better quality health care system. Excerpts:
The U.S. health care system squanders $750 billion a year — roughly 30 cents of every medical dollar — through unneeded care, byzantine paperwork, fraud and other waste, the influential Institute of Medicine said Thursday in a report that ties directly into the presidential campaign.
President Barack Obama and Republican Mitt Romney are accusing each other of trying to slash Medicare and put seniors at risk. But the counter-intuitive finding from the report is that deep cuts are possible without rationing, and a leaner system may even produce better quality.
If banking worked like health care, ATM transactions would take days, the report said. If home building were like health care, carpenters, electricians and plumbers would work from different blueprints and hardly talk to each other. If shopping were like health care, prices would not be posted and could vary widely within the same store, depending on who was paying.
If airline travel were like health care, individual pilots would be free to design their own preflight safety checks — or not perform one at all.
How much is $750 billion? The one-year estimate of health care waste is equal to more than ten years of Medicare cuts in Obama’s health care law. It’s more than the Pentagon budget. It’s more than enough to care for the uninsured.
Getting health care costs better controlled is one of the keys to reducing the deficit, the biggest domestic challenge facing the next president. The report did not lay out a policy prescription for Medicare and Medicaid but suggested there’s plenty of room for lawmakers to find a path.
Both Obama and Romney agree there has to be a limit to Medicare spending, but they differ on how to get that done. Obama would rely on a powerful board to cut payments to service providers, while gradually changing how hospitals and doctors are paid to reward results instead of volume. Romney would limit the amount of money future retirees can get from the government for medical insurance, relying on the private market to find an efficient solution. Each accuses of the other of jeopardizing the well-being of seniors.
More than 18 months in the making, the report identified six major areas of waste: unnecessary services ($210 billion annually); inefficient delivery of care ($130 billion); excess administrative costs ($190 billion); inflated prices ($105 billion); prevention failures ($55 billion), and fraud ($75 billion). Adjusting for some overlap among the categories, the panel settled on an estimate of $750 billion.
Examples of wasteful care include most repeat colonoscopies within 10 years of a first such test, early imaging for most back pain, and brain scans for patients who fainted but didn’t have seizures.
If airline travel had the passenger safety record of American hospitals, a fully loaded 747 would fall out of the sky killing all passengers each week.
The only pathway forward in health system reform is eliminating waste due to inefficiency and poor quality. The major impediments to waste elimination continue to be the private health insurance business model (wastefully inefficient), corporate welfare (we buy too many drugs and medical devices), and inappropriate care (health insurers pay for medical interventions that are not clinically indicated).
Health system reform can not succeed if it begins by entrenching corporate interests, especially those of the health insurance industry. We can not continue to pretend that market forces will make corporate welfare disappear. The pretense of market forces in health care is what gives corporate welfare its stranglehold on the American economy.
Every American needs to stop being afraid of 'socialized medicine' and 'rationing' and start being afraid of simply being admitted to an American hospital, where patient safety is an afterthought, if it is ever considered.
Dr. Joe Jarvis