$200 billion wasted annually on excessive testing & treatments

Everyone knows that medical care in the United States is marked by waste, largely from unnecessary treatments and excessive testing. What to do about it is another matter.

Difficulties eliminating waste

Sutter Health, a large hospital chain in Northern California, tried to intervene in a simple way: deleting the button that physicians used to order daily blood tests, which were seen as a waste. Surprisingly, it didn’t change anything. The hospital’s medical-records software was set up to automatically save physicians’ favorite selections. Naturally, daily blood tests were at the top of the list. In other words, redundant and excessive testing was built right into the hospital’s software, ensuring that waste would continue.

There’s no shortage of waste to trim. America’s healthcare system is a $3.4 trillion enterprise. As this example from California illustrates, even seemingly innocuous changes can come with complications.

Causes of waste and its consequences for patients

Many physicians practice what is called “defensive medicine,” opting for overtreatment and excessive testing for fear of malpractice litigation. In other cases, doctors can’t get their hands on the results of previously conducted tests, meaning they have to order new ones. And still, the profit motive remains. There is a financial incentive for healthcare providers to have just one more test or treatment done following a procedure, even if there isn’t a strong medical incentive to have it done.

For patients, repeated or excessive tests and treatments can have negative financial and health consequences. While blood draws can lead to soreness and irritation, other tests can be detrimental to patients’ health if conducted too frequently.

Why it matters and what to do

Experts estimate that around $200 billion is wasted every year on excessive testing and treatments. At a time when hospital margins are softening, costs must be top of mind. Hospitals must band together to provide care that is more cost-effective. The goal has to be delivering excellent patient outcomes without the exorbitant costs – providing care that is quality and cost-effective, in other words. IT system structure and software cannot make up for a lack of education on best practices. To understand how to provide efficient and effective care, and how to earn appropriate reimbursement, tracking and trending utilization against payment and outcomes is key.

MedCom Solutions can help.

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