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Research Report

$750 Billion in Health Care Dollars Wasted Annually

By Vanessa Radatus

As we near Election Day, the U.S. health care system continues to fuel fiery debate between President Barack Obama and GOP candidate Mitt Romney. But where will all their assertions and accusations get us in the end?

President Obama’s plan aims to keep Medicare in its current form under the Affordable Care Act, guaranteeing it as the primary option for seniors, while working to cut costs. On the other hand, Romney promises to repeal the health care law and restore the $716 billion to Medicare. But where are the facts, the data, and the real numbers that can prove that America’s most popular and most expensive government entitlement programs can be cost-efficient and still available to future generations?

 The Seattle Times article, “US Health Care System Wastes $750B a Year,” addressed a new report by the Institute of Medicine stating the harsh truth of our current health care system.

“The U.S. health care system squanders $750 billion a year – roughly 30 cents of every medical dollar – through unneeded care, byzantine paperwork, fraud and other waste.”

As if it’s not already difficult to visualize what $750 billion dollars amounts to, it’s even more unfathomable to realize it has all gone to waste. The Seattle Times explains it well, aliking it to business models and costs we can understand.

“If banking worked like health care, ATM transactions would take days…If home building were like health care, carpenters, electricians and plumbers would work from different blueprints and hardly talk to each other.

If shopping were like health care, prices would not be posted and could vary widely within the same store, depending on who was paying. If airline travel were like health care, individual pilots would be free to design their own preflight safety checks – or not perform one at all.”

So just how much is $750 billion? To put it in persepctive, it would provide every living person on Earth (approximately 7 billion) with $107. And while it may not seem like much, 80% of the worlds’ population lives on less than $1 a day. Specifically, this one-year waste on health care is equal to more than 10 years of Medicare cuts in Obama’s health care law.

The report identified six major areas of waste (Adjusting for some overlap among the categories, the panel settled on an estimate of $750 billion per year)

  • Unnecessary services ($210 billion annually)
  • Inefficient delivery of care ($130 billion)
  • Excess administrative costs ($190 billion)
  • Inflated prices ($105 billion)
  • Prevention failures ($55 billion)
  • Fraud ($75 billion)

While we won’t see this overbearing number diminish overnight, the future of our health care relies on our nation’s leaders to execute a plan that demands quality, reduces waste and cost for all U.S citizens. The truth is, we simply cannot afford another $750 billion down the drain. Read More…

What’s in a Name? For Illnesses, it’s Fodder for Debate

A study of chronic fatigue syndrome, published last month in The Lancet, has highlighted how competing case definitions for illnesses and syndromes can lead to confusion rather than clarification — what you see depends on who’s doing the looking — and has stoked a fierce debate among researchers and patient advocates on both sides of the Atlantic as noted in this New York Times article.

“If you recognize something is happening, you need a case definition so you can count it,” said Andrew Moss, an emeritus professor of epidemiology at U. C. San Francisco and an early AIDS investigator. “You need to know whether the numbers are going up or down, or whether treatment and prevention work. And if you have a bad case definition, then it’s very difficult to figure out what’s going on.”

Once a disease can be diagnosed reliably through lab tests, creating an accurate case definition becomes easier. But when an ailment has no known cause and its symptoms are subjective — as with chronic fatigue syndrome, fibromyalgia, and other diseases whose characteristics and even existence have been contested — competing case definitions are almost inevitable.

What does this mean for the patient? Well, quite a lot. As the article notes, treatments could easily vary depending upon which diagnostic measurements a physician were using. In the case of chronic fatigue, some researchers believe that the syndrome is  a psychological condition and patients would benefit from exercise. Other researchers, however, are deeply convinced it is a viral disease and note that the exercise therapy advised by the Lancet study can cause major relapses in people with chronic fatigue syndrome — a claim supported by some patient surveys. Read more…

We sense…a debunking in the future

As per this New York Times article, one of psychology’s most respected journals has agreed to publish a paper presenting what its author describes as strong evidence for extrasensory perception, the ability to sense future events. The decision may delight believers in so-called paranormal events, but it is already mortifying scientists.

Advance copies of the paper, to be published this year in The Journal of Personality and Social Psychology, have circulated widely among psychological researchers in recent weeks and have generated a mixture of amusement and scorn—and some discussion of scientific process, which be a useful by-product of the debate.

We have a premonition, a extrasensory sense if you will, that upon further review this research will be debunked and the authors discredited. Read more…

Weighing the Evidence on Exercise

This is an important article from the NY Times of April 18, that outlines the relationship between exercise and weight. In a nutshell, it cites research that suggests that dietary intake is the determining factor on weight and the exercise in the absence of intake reduction will have little long-term impact. Mechanisms exist that lead individuals to eat more following exercise, negating the caloric of the activity. Gender differences making loss harder for women is also described.