25% of billions of US healthcare costs are wasted

The Department of Health and Human Services, as well as Medicare and Medicaid Service Centers, report US health care spending in 2017 of $ 3,5 trillion, up 3,9% more than in 2016. But this increase in costs does not necessarily lead to a better quality of service.

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The fact is that in US medicine there is a huge amount of meaningless expenses. They may be associated with attempts to make healthcare more accessible for patients, according to a new study published in the journal of the American Medical Association, writes ABC News.

A study by Dr. Natasha Pereh of the University of Pittsburgh School of Medicine and Humana Healthcare representatives estimates the annual cost of waste in the healthcare system from 760 to 935 billions of dollars. This is about a quarter of all healthcare costs.

Such huge financial losses are due to unnecessary hospital visits, fraud, complications associated with hospitalization, poor outpatient care, branded drugs, and overly aggressive treatment, but the list is not exhaustive.

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Most of the money is wasted due to administrative expenses. Researchers have suggested that, ironically, these costs may be related to attempts by insurance companies to reduce ... meaningless spending. 265 billions of dollars are spent on administrative difficulties each year, the report said. These are tasks such as billing by doctors and insurance companies. Many of these tasks are entrusted to government agencies and insurance companies.

“In efforts by payers [insurance companies, Medicare, Medicaid] to reduce costs through measures such as requiring prior authorizations for certain drugs or procedures, there has actually been an increase in costs on the part of providers [physicians, nurse practitioners],” said William Schrank, chief medical director of Humana and lead author of the study.

So between the insurance companies and health care providers there was a discrepancy in what would actually reduce costs. This discrepancy has increased the amount of empty spending.

The second largest category of meaningless expenses are high prices for drugs, laboratory tests, examinations and visits to the clinic, which led to losses in 240 of billions of dollars. The authors of the study noted that prices are much higher than they should be, due to the lack of transparency and competitive markets in US healthcare. To this, Schrank states: “Not a single policy change will solve this problem. We need a sound political approach so that the market can compete. ”

Although the results may seem bleak, the study offers an optimistic outlook. In addition to losing money, researchers have discovered potential savings.

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Measures to reduce nosocomial infections and ensure that people undergo outpatient treatment are already being introduced. They can be further optimized to reduce pointless spending. Integrating behavioral and physical health, disease prevention initiatives, and expanding access to hospices can also help. The study estimated potential savings ranging from 191 to 282 billions of dollars.

Schrank hopes to improve the health system.

“Given there is so much good in our health care system, if we take a more active role in eliminating wasteful spending, addressing affordability issues and improving health care, we don't need to fundamentally destroy the health care system,” he said.

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