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AP Photo/Steve Helber
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WASHINGTON
(AP) -- The U.S. health care system squanders $750 billion a year - roughly 30
cents of every medical dollar - through unneeded care, byzantine paperwork,
fraud and other waste, the influential Institute of Medicine said Thursday in a
report that ties directly into the presidential campaign.
President
Barack Obama and Republican Mitt Romney are accusing each other of trying to
slash Medicare and put seniors at risk. But the counter-intuitive finding from
the report is that deep cuts are possible without rationing, and a leaner
system may even produce better quality.
"Health
care in America presents a fundamental paradox," said the report from an
18-member panel of prominent experts, including doctors, business people, and
public officials. "The past 50 years have seen an explosion in biomedical
knowledge, dramatic innovation in therapies and surgical procedures, and
management of conditions that previously were fatal ...
"Yet,
American health care is falling short on basic dimensions of quality, outcomes,
costs and equity," the report concluded.
If banking
worked like health care, ATM transactions would take days, the report said. If
home building were like health care, carpenters, electricians and plumbers
would work from different blueprints and hardly talk to each other. If shopping
were like health care, prices would not be posted and could vary widely within
the same store, depending on who was paying.
If airline
travel were like health care, individual pilots would be free to design their
own preflight safety checks - or not perform one at all.
How much is
$750 billion? The one-year estimate of health care waste is equal to more than
ten years of Medicare cuts in Obama's health care law. It's more than the
Pentagon budget. It's more than enough to care for the uninsured.
Getting
health care costs better controlled is one of the keys to reducing the deficit,
the biggest domestic challenge facing the next president. The report did not
lay out a policy prescription for Medicare and Medicaid but suggested there's
plenty of room for lawmakers to find a path.
Both Obama
and Romney agree there has to be a limit to Medicare spending, but they differ
on how to get that done. Obama would rely on a powerful board to cut payments
to service providers, while gradually changing how hospitals and doctors are
paid to reward results instead of volume. Romney would limit the amount of
money future retirees can get from the government for medical insurance,
relying on the private market to find an efficient solution. Each accuses of
the other of jeopardizing the well-being of seniors.
But panel
members urged a frank discussion with the public about the value Americans are
getting for their health care dollars. As a model, they cited "Choosing
Wisely," a campaign launched earlier this year by nine medical societies
to challenge the widespread perception that more care is better.
"Rationing
to me is when we are denying medical care that is helpful to patients, on the
basis of costs," said cardiologist Dr. Rita Redberg, a medical school
professor at the University of California, San Francisco. "We have a lot
of medical care that is not helpful to patients, and some of it is harmful. The
problem is when you talk about getting rid of any type of health care, someone
yells, `Rationing.' "
More than
18 months in the making, the report identified six major areas of waste:
unnecessary services ($210 billion annually); inefficient delivery of care
($130 billion); excess administrative costs ($190 billion); inflated prices
($105 billion); prevention failures ($55 billion), and fraud ($75 billion).
Adjusting for some overlap among the categories, the panel settled on an
estimate of $750 billion.
Examples of
wasteful care include most repeat colonoscopies within 10 years of a first such
test, early imaging for most back pain, and brain scans for patients who
fainted but didn't have seizures.
The report
makes ten recommendations, including payment reforms to reward quality results
instead of reimbursing for each procedure, improving coordination among
different kinds of service providers, leveraging technology to reinforce sound
clinical decisions and educating patients to become more savvy consumers.
The
report's main message for government is to accelerate payment reforms, said
panel chair Dr. Mark Smith, president of the California HealthCare Foundation,
a research group. For employers, it's to move beyond cost shifts to workers and
start demanding accountability from hospitals and major medical groups. For
doctors, it means getting beyond the bubble of solo practice and collaborating with
peers and other clinicians.
"It's
a huge hill to climb, and we're not going to get out of this overnight,"
said Smith. "The good news is that the very common notion that quality
will suffer if less money is spent is simply not true. That should reassure
people that the conversation about controlling costs is not necessarily about
reducing quality."
The
Institute of Medicine, an arm of the National Academy of Sciences, is an
independent organization that advises the government.
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