Thomson Reuters: Healthcare can cut $3.6 trillion in waste
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Piggybacking on a previous report that concluded that the U.S. healthcare system wastes $700 billion a year, the report from New York City-based Thomson Reuters analyzed the country's public and private sector efforts to reduce waste in the healthcare system and identified five strategies that have been deployed to cut costs and improve patient care.
By incorporating these best practices into the organizational structure of the healthcare industry, it could be possible to cut waste 5 percent per year, according to the firm. In a 10-year span, that would add up to $3.6 trillion and keep total healthcare expenditures at their current rate of about 17 percent of the nation's gross domestic product (GDP).
Among the proposed strategies are the following:
- Engage consumers: By engaging the public in discussions with their caregivers regarding the value and risk of specific treatment options, it is possible to dramatically reduce money spent for unnecessary treatments.
- Coordinate care: Healthcare providers lacking access to patients' medical records leads to the duplication of tests and inappropriate treatments that are estimated to cost up to $50 billion annually. Simple incentives have made a significant difference in the implementation of EMRs in several healthcare systems.
- Manage disease and maintain wellness: This strategy ensures that patients are actively engaged, along with their clinicians, in managing their own health through attention to personal behavior, disease prevention, early detection and appropriate care for chronic diseases.
- Design for patient safety and quality: Preventable medical errors account for $50 billion to $100 billion in annual healthcare spending. By implementing a simple checklist approach based on evidence-based best practices, several healthcare systems have improved patient outcomes and reduced costs.
- Reduce opportunities for fraud: In 2007, when the U.S. spent roughly $2.3 trillion on healthcare, fraud was estimated to account for 5 to 10 percent of healthcare spending, according to a report published by the George Washington University School of Public Health and Health Services. Computerized systems that track data anomalies to identify fraud and breaches in payment integrity have been proven to stem these costs in several state Medicaid programs, the Thomson Reuters report found.
According to Thomson Reuters, there are six targets for reducing waste, including administrative inefficiencies, provider errors and inefficiencies, lack of care coordination, unnecessary care, preventable conditions and avoidable care, as well as fraud and abuse.
“To reduce waste in the healthcare system, the medical community needs to set targets, identify strategies and initiatives and implement them broadly,” the report concluded. “The targets proposed in this paper suggest a 25 percent reduction in waste within five years and a 50 percent reduction in 10 years. The medical community may not be able to measure progress against the targets themselves, but it can measure many proxies.”