The price of waste

In an article on waste in health care, ProPublica examines a study in Washington state by the nonprofit Washington Health Alliance, which sought to determine the price of unnecessary medical care by analyzing insurance claims for 1.3 million patients over one year for 47 tests or services. These tests or services had been deemed frequently overused by the U.S. Preventive Services Task Force and the American Board of Internal Medicine Foundation's Choosing Wisely campaign.

What the Washington Health Alliance found was $282 million spent on unneeded treatment for 600,000 patients. Additionally, more than a third of the total amount spent on the 47 tests or services was for unnecessary care. This included annual cervical cancer screenings, tests for low-risk surgery, and annual heart tests on low-risk patients.

Other states have also analyzed waste in health care: for a single year, a study in Virginia found the price of waste to be $586 million, while a Minnesota study on 19 low-value services had found $55 million wasted. Citing a figure from from the National Academy of Medicine, ProPublica puts the price of unnecessary care at $765 billion per year, or a quarter of the total amount spent on health care annually.

A simple doctor's visit can carry with it an expectation for a diagnostic test, a prescription, or some other tangible evidence that the patient is being treated. A wait-and-see approach can often feel like not enough. On the doctor's end, financial incentives can encourage recommendations for procedures. This combination can lead to unnecessary procedures and tests being done - neither of which comes free. To avoid wasteful medical care, the Washington Health Alliance proposes a transition to a system that pays for the value of care rather than the volume.