There is a widespread claim that up to 30% of health care dollars are wasted.  This claim is similar to other claims of fraud and abuse often extolled in political campaigns.  The questions, at least in medicine, is whether this claim is accurate and even if it is, is there a way to improve health care spending.

A recent commentary (L Rosenbaum. NEJM 2017; 377: 2392-7) tackles the “Less-Is-More-Crusade” in medicine.  Some of the key points:

• The 30% waste figure is often attributed to Dartmouth investigators ((http://www.dartmouth.atlas.org/keyissues/issue.asp?con=1338)
• This figure has many limitations including inadequate control for severity of illness, regional price differences, and the possibility that variation is due to underuse as well as overuse.
• Confounders: difficulty controlling for sicker patients
• “Other research suggests that higher spending is actually associated with better outcomes.”

Dr. Rosenbaum describes how MIT economists identified what worked out to be a randomization experiment of health care.  These economists examined hospital performance among patients transported by ambulance.  Since the ambulance companies had hospital preferences, the “patients [were] essentially randomly assigned to hospitals.”  Key finding: “hospitals that spend more during hospitalizations for various acute conditions have lower mortality rates at 1 year post-hospitalization than lower-spending-hospitals, a relationship driven largely by inpatient treatment intensity” (J Pol Econ 2015; 123: 170-214).

Another recent analysis found that Medicare beneficiaries discharged from EDs in “hospitals with the lowest admission rates were 3.4 times as likely to die within a week” as their counterparts at hospitals with the highest admission rates.  In addition, “low-admitting EDs tended to serve generally healthier populations.”

Dr. Rosenbaum points out that while many attribute physician greed as a driver of excess testing/overdiagnosis in a fee-for-service model, there are many other explanations.  Physician expertise and desire for more certainty are relevant factors.

My take: This commentary provides a lot of nuance.  Yes, there is certainly waste but there is a lot of underuse in medicine. Like in areas outside of medicine, “eliminating fraud and abuse” is an oversimplification and will be difficult to achieve.

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