Waste in US Healthcare System

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Jan 19, 2022

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Section: 2.0 - Financial Consideration

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Waste in the US Health Care System

"$935 Billion A Year [Nearly a Trillion]"

There is a significant amount of waste in U. S. Healthcare system. It is approaching a trillion dollars a year, Not a trillion dollars in 10 years. $1 trillion dollars a year that's a staggering amount in terms of waste is concerned.

Estimated Costs and Potential for Savings

The estimated cost of waste in the US health care system ranged from $760 billion to $935 billion, accounting for approximately 25% of total health care spending, and the projected potential savings from interventions that reduce waste, excluding savings from administrative complexity, ranged from $191 billion to$282 billion, representing a potential 25% reduction in the total cost of waste.

We have clinical studies to show how we can decrease the waste by at least $282 billion. As a matter of fact, the only category that we cannot account for decreasing the waste is administrative complexity because there is no clinical study to show that.

Six Waste Domains With Cost and Intervention Components

So as far as the 2012 study is compared to the 2019 study, you can see Administrative Complexity has even gone higher from 27% to 31%. Overtreatment/ Low-Value Care has decreased from 21% to 10%. And these are some of the policies that came out and those policies reduced physicians ordering unnecessary tests. Fraud and Abuse have been definitely cut down from 19% to 8%. But Pricing Failures continue to be a big issue, especially in pharmacy. Failure of Care Deliveries is a big issue in terms of readmissions and Failure of Coordination Care. Unfortunately, in this digital environment, in this situation where we can order any delivery at home, we cannot unfortunately get good care.

Medical Debt in the US, 2009-2020

Americans owe nearly twice as much medical debt as was previously known, and the amount owed has become increasingly concentrated in states that do not participate in the Affordable Care Act’s Medicaid expansion program.

Abuse Notice

https://jamanetwork.com/journals/jama/article-abstract/2782187

The Long Fix

Written by Vivian Lee, in her book "The Long Fix", she puts it simply: "We pay more for less." Unfortunately, we pay a lot more for less. We waste, we overtreat, we make deadly mistakes and we practice medicine inconsistently.

More importantly, in her book, she gives at the end some resolutions to help these systems improve their coordination of care so that they can decrease costs. Everything boils down to this: As a physician, as a clinician, if you're going to get into the field, this is where we are moving towards we are officially moving towards fee for service.