$740 billion - this is the amount of estimated waste in the US healthcare system. Most would agree that controlling healthcare costs and improving quality will only be possible by reducing this astonishing amount of waste. Much of this waste is in the form of unnecessary, redundant or ineffective treatment that has no positive effect on outcomes. Inappropriate care that leads to waste can be sorted into 3 categories:
Overuse can be said to occur when the risks of providing a service exceeds the benefits or when the benefits of the services do not justify their costs. This includes situations where there is an alternative lower-cost service available that may yield equal or better benefits to the patients’ health. Overuse also exposes patients to unnecessary risks without increased benefits.
Underuse occurs when medically beneficial services are not provided. The underuse of healthcare services may reduce costs in the short term however the lack of effective treatment for a worsening medical condition can greatly increase costs in the long term.
Misuse of medical services includes patient safety considerations such as avoidable complications and medical errors. Hospital acquired infections and pressure ulcers fall into this category.
Causes & Solutions
One of the causes behind these types of inappropriate care is the variation in provider practice style or the unique approach that each physician takes when recommending care. When there is a lack of consensus on the best treatment for a particular condition, practice style can play a much greater role in care delivery and may lead to waste. The development of evidence-based guidelines can help standardize the delivery of healthcare and offer clearly defined best practices for particular situations. Such guidelines can reduce the variation in care provided to patients especially when there is uncertainty about the best treatment approach.
Another factor behind inappropriate care is the fragmentation of care delivery due to a lack of incentives for provider coordination. Care delivery models such as Accountable Care Organizations utilize a “shared risk” component to incentivize a more coordinated approach to providing care and thereby reducing waste. The proliferation of electronic medical records is also a step towards building an infrastructure centered on care coordination.
The fee-for-service system of paying for medical services is also problematic for boosting efficiency and quality. This payment model creates a strong financial incentive to perform a high volume of tests and services, regardless of whether those services actually benefit the patient. Payment reforms such as bundled payments and paying a case rate for patients may help remove this incentive and instead offer a motivation to coordinate care.
In order for any of these efforts to be successful it is imperative for providers of medical care to adhere to evidence-based guidelines in order to develop a clearer understanding of efficient and high-quality care. Promoting efficient and appropriate medical care and thereby reducing waste can reduce the overall cost of care reduced while attaining improvements in quality.