An estimated 30 percent of health care spending -- amounting to $750 billion a year -- is wasted, according to a recent report by the Institute of Medicine.
I know. As a doctor, I am party to this waste, and I know how we can recover it.
In a private conversation, a cardiologist tells me about his partners -- "loose guns" he calls them. "At the hint of chest pain they will do a cardiac cath and this makes everyone happy," he says. The patient feels good that something was done, the doctor gains certainty of his presumptive diagnosis and the hospital makes money. While it may seem like a win-win-win, in fact, we all lose as the health care expenditure tops $2 trillion siphoning funds from education, housing and business innovation.
The IOM report notes that unnecessary services are responsible for nearly one-third or $210 billion of wasted expenditure. I too order excessive services like CT and MRI scans, without regard to cost. Often these services are in the gray zone of medicine where it is unclear if some procedures are really necessary.
While it is hard to pinpoint which individual doctors or hospitals are the big spenders, regional data show unwarranted high costs of care with little difference in quality. The Dartmouth Atlas shows that the annual cost to care for a Medicare patient in Miami is nearly twice that in Minneapolis ($11,352 vs. $5,213). Perhaps Miami Medicare patients are sicker or poorer patients, but that does not fully account for the difference.
When we doctors talk about waste, we often beat around the bush. We know the system is full of waste, but when confronted we blame the patients or malpractice attorneys. My cardiologist colleagues tell me it is patients who "demand more be done." In part this is true. The general perception among patients is "more care is better care."
And it's true that fear of being sued contributes to doctors practicing "defensive" medicine. But when the threat of litigation is reduced, with lower caps and stringent regulations, as was done in Texas and Colorado, the cost of care did not go down. Perhaps over-utilizing health care resources has become a "bad habit, ingrained in our medical culture."
There is another less-talked-about reason for unnecessary services. One person's waste is another person's income. Another cardiac catherization, another back surgery means more income for doctors, hospitals and the health care system and its archaic administrative services.
The IOM report found that nearly a quarter of all the waste, $190 billion, is due to unnecessary administrative costs. Last week I was irate on the phone with a non-medical clerk at the insurance company, telling her why my patient needed a specific medicine. This third customer service agent asked me to fill out a form which would take "just 20 minutes." Insurers have created hoops and hurdles, costing providers time and money and adding to the waste.
The IOM reported other areas of waste that include inefficient delivery of services and unnecessarily high costs of treatment. On a Friday afternoon when my office is closed and a patient calls with a problem, which I cannot sort out over the phone, I send them to an ER, an inefficient site of service costing four times more than a clinic visit. Unnecessarily high cost is what I experienced when my daughter injured her nose playing touch football and the hospital charged me $438 for an X-ray, while the charges at another nearby clinic were only $137.
So how can we reduce waste?
We need to follow bank robber Willie Sutton's rule: Go where the money is. Ultimately, it is the physician who orders the procedures, the imaging, and the medicines. In fact, we doctors joke that the most expensive medical instrument is the doctor's pen, accounting for 80 percent of the health care expenditure. In order to reduce waste, doctors need to become integral partners in the cost-cutting process.
For years, as a doctor I have taken what I thought was the high moral ground. Costs don't matter, I believed. All that matters is that I care for the physical and mental well being of my patients as best I can.
I behave this way because this is the American culture of medicine and this is what I have been taught. In medical school during pharmacology class, I memorized the generic, the trade and the pharmacological names of drugs but not their prices. During my internship if I mentioned that we were doing unnecessary expenditure on a dying patient, I was frowned upon. Yes, some mentors encouraged us to use cheaper generic drugs, yet that was often an afterthought. We, the doctors, did not want to let money influence patient care. So today most doctors care for patients with little or no knowledge or concern for cost.
With the cost of health care and excessive waste leading to a budget crisis and personal bankruptcies, doctors like me are in a dilemma: Should we be making patient care decisions based on cost? Will cost-conscious doctors prejudice their alliance to their patients and violate doctor-patient trust? When I discourage my patients yet again for a test, will they wonder if I am saying this because the test is really unnecessary or because it costs too much?
Here is how I see it. There is 30 percent fat in our health care system, and I am convinced of this not just because the IOM report says so but because other nations like Canada, Norway, Finland and Switzerland only spend less than 12 percent of their GDP on health care compared to our 18 percent yet provide equal or better quality of care.
While doctors might not be able to eliminate all the waste, we can do a lot. If we only practiced evidence-based medicine -- that is only do those tests and surgeries which have a proven benefit -- and not be "loose guns" with our health care dollars. Yet, in return doctors will need legal cover, which will make us immune from law suits if we followed evidence-based guidelines and a bad outcome occurred.
How will all this affect my own practice of medicine? I'd like to say I'll think twice before I order that next MRI. And I might practice a little more "wait and see" medicine, rather than rush to order expensive tests or treatment. Will my patients object? Will I follow through? In all honesty, it's hard to say. To reduce the waste in health care, American medicine requires a culture change, and the doctors have to lead it.
For more by Manoj Jain, MD MPH, click here.
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