Throughout what has been an ever-evolving, multi-year health care “debate,” we’ve heard lots of numbers and stats tossed around. One that is getting more and more play is the “waste and inefficiency” data point: specifically, that 30 percent of the $2.3 trillion spent on health care is wasted.
Like many statistics, though impressive, the 30-percent stat doesn’t tell us much at face value. To most people, even a fraction of such a large number is still a really, really big number. Where is the waste coming from? Who is wasting all the money? What does “waste” even mean in this context? It’s a rather loaded term, after all. Identifying where the inefficiencies are in the health care system and why certain activities driving cost are, in fact, “wasteful” is a key to eliminating the waste and creating a more streamlined system that is driven by value and quality.
NEHI, a national health policy institute, recently took a crack at identifying seven specific areas of waste and inefficiency that together drain $521 billion from the system each year. More important than simply naming the waste “culprits,” NEHI also outlined steps that could be taken to reign in the unnecessary spending without reducing quality of care.
Bend the Curve, an educational campaign launched by NEHI, identifies specific policy actions for reducing wasteful health care spending in these critical areas:
- Reducing emergency department overuse
- Reducing antibiotic overuse
- Improving patient medication adherence
- Reducing vaccine underuse
- Preventing hospital readmissions
- Decreasing hospital admissions for ambulatory care sensitive conditions
- Preventing medication errors
NEHI’s corresponding recommendations for delivering safer, higher quality and more affordable care are realistic and intuitive. For example, improving medication adherence by improving care coordination and enhancing patient engagement and education, among other things, could save a whopping $290 billion annually. Reducing unnecessary use of emergency departments could save $38 billion each year. 24-hour access to a physician telephone service was found to reduce unnecessary emergency department visits from 41 percent to only 8 percent. Reducing preventable hospital readmissions could save an additional $25 billion. Reducing vaccine underuse is a $53 billion opportunity, and increasing use of generic rather than brand-name prescriptions would also easily reduce costs as brand-name drugs are about three times more expensive.
Like trimming the fat on our own bodies, trimming the fat in the health care system is fairly simple…but certainly not easy to do. Nevertheless, NEHI’s report—and the conversation they advanced—gets us closer.