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What you need to know for 08/23/2017

Editorial: Unhealthy waste of money

Editorial: Unhealthy waste of money

A little less waste will save a lot of money

We’ll start with the good news on health care: A survey released Tuesday indicates that annual premiums for employer-provided health insurance rose just 4 percent last year, one of the slowest paces in years.

Now for the bad: The average cost for a family plan has risen to $15,745. Hard to imagine a middle-income family trying to come up with even one-quarter of that — the typical worker’s share — without blowing a hole in the budget.

And the news doesn’t get any better with age: A report in the Journal of General Internal Medicine last week found that Medicare-eligible households spent, on average, $38,688 out of pocket on health care during their five years of life. The study covered the years 2002-2008; one can only imagine how much that figure has risen given the health care inflation since.

An explanation for all this bad news also came last week, in the form of yet another study, by a panel of the influential Institute of Medicine: It showed that in 2009, roughly 30 percent of health care spending — $750 billion worth — was wasted. Even worse, some of it made people sicker than if they’d simply been left alone.

To paraphrase The Associated Press story on the report, if banking worked like health care, ATM transactions would take days; if home building was like health care, carpenters, electricians and plumbers would all be working from different plans, hardly communicating with one another; if shopping were like health care, consumers wouldn’t know how much anything cost, and prices for the same item could vary widely even within the same store.

Among the system’s most noteworthy failings: unnecessary services, such as repeated tests ($210 billion); inefficiently delivered services, such as when a scan is performed in a hospital rather than an outpatient center ($130 billion); fraud ($75 billion); missed prevention opportunities ($55 billion); inflated prices ($105 billion); and excess paperwork and unnecessary administrative costs ($190 billion).

The panel’s recommendations include changes that, to some degree, are being implemented under the Affordable Care Act: ways to better coordinate care among providers, to make medical prices more transparent and to increase the use of health information technology. There’s obviously a long way to go, but as the report notes, even small progress by hospitals, doctors and insurers could make a substantial difference in the quest to tame health care inflation and in improving the quality of health care.

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