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Key cuts to US healthcare waste can save $3.6 trillion

Washington, June 14, 2010

The US healthcare industry can cut $3.6 trillion in waste over 10 years with a few common-sense steps to eliminate fraud, errors and to encourage efficiency, according to an analysis by Thomson Reuters.   

Recommended changes include giving patients a medical "home" to better coordinate care, eliminating a culture of fraud, encouraging patients to ask about healthcare costs, and rewarding quality improvement initiatives.

Such changes could reduce waste by 5 percent a year, adding up to $3.6 trillion over 10 years, according to the report.

"Last year, we published a report concluding that the US healthcare system wastes $700 billion a year," Bob Kelley, vice president for healthcare analytics at Thomson Reuters, said in a statement.

"This new report describes a possible path for significantly reducing that waste."    

Kelley and colleagues at Thomson Reuters, parent company of Reuters news agency, asked clients what they were doing that worked. They also read published studies on ways to cut waste.

The report, available at https://factsforhealthcare.com, outlines some of the best measures.
 They include: 

* Encouraging everyone to manage their own health through personal behaviour to prevent diseases, early detection and appropriate care for chronic diseases.
* Using a simple checklist approach to prevent medical errors, which cost $50 billion to $100 billion a year. For instance, Dr Peter Provonost at Johns Hopkins University in Baltimore estimates his checklist he uses when inserting a catheter to deliver medication, called a central line, reduced infection rates from 11 percent to zero. This prevented 43 infections and eight deaths and saved the hospital $2 million.
* Reducing opportunities for fraud. A George Washington University report estimated that in 2007, fraud accounted for 5 percent to 10 percent of the $2.3 trillion in healthcare spending.
* Reduce fragmentation in the delivery of care, better coordinating care among specialists and cutting administrative costs.
* Create a "culture of performance improvement" that promotes the quick dissemination and adoption of best practices.

Electronic records are key, the report said. "The Minnesota Department of Health estimates that when fully implemented, a law requiring the standard, electronic exchange of routine healthcare business transactions will save the state more than $60 million per year," it reads.

Democrats in Congress passed a healthcare reform bill in March that largely focuses on health insurance. Republicans say the plan is too expensive at a time of monstrous federal budget deficits, but President Barack Obama has argued it is possible to use reform to save money.   

"Great effort was expended to provide a balanced and specifically apolitical viewpoint equally weighing the concerns of patients, providers, payers, and purchasers," the Thomson Reuters report reads. - Reuters




Tags: Fraud | Waste | US healthcare |

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