Wasting Away

About one third of the $2.6 trillion in annual U.S. healthcare spend may be waste. Normally, one might think that with so much waste in the system, it would be easy to tackle lots of low hanging fruit. Not necessarily. There are considerable challenges lying ahead of us if we are going to put a dent in the overspending. Picking up from last time, today we will cover 3 of the 6 categories of waste1.

Failures of care delivery

This category includes a lack of widespread adoption of known best practices, or a problem with execution of delivering care. Examples of each include failing to be compliant with correct safety practices such as hand washing protocols, or an iatrogenic adverse event that is preventable such as a medication error. Delivery failures result in patient injuries or worse clinical outcomes. They range from temporary and mild to permanent and severe. But most interestingly, 44% were found to be either clearly preventable or likely preventable according to a study of Medicare patients by OIG (Office of the Inspector General).

Failures of Care Coordination

As you would expect, these are problems arising because care is disjointed. They can lead to avoidable complications or readmissions, or decline in functional status for a chronically ill patient. It involves the transition of care from one care setting to another. Nationally, almost 20% of Medicare patients discharged from hospital result in readmissions within 30 days. But importantly, 75% are thought to be avoidable.

Fraud & Abuse

This is an obvious one, as we all know that this is a problem nationally. This category includes fake medical bills and scams, as well as upcharging. The costs of inspections and regulations to catch wrongdoing are also taxing the system.

Of the 3 categories above, I really believe that we are ahead of the mean. But, there’s always room to improve. Teaming up together in a CIN (clinically integrated network) would allow us to remove some of the waste in care delivery and care coordination.

Next time, we will cover the remaining 3 categories of waste: overtreatment, administrative complexity and pricing failures.

1Reducing Waste in Healthcare, Health Policy Brief. Robert Wood Johnson Foundation, Dec. 13, 2012.